Frequently Asked Questions about Loans
Q. Why do Insurance Professionals need Oak Street Funding?
A. Most independent insurance agencies and agents have limited access to capital from banks. You can now borrow money directly from OSF by collateralizing your in-force commissions from qualified insurance carriers without giving up your most important asset — the customer. The funds can be utilized for any business purpose such as working capital, capital expenditures, purchasing leads, investing in technology or staff additions in order to increase your sales and income. We can respond quickly to our customers. Back to Top
Q. Why should I deal with Oak Street Funding?
A. Oak Street Funding has been able to provide millions of dollars to insurance agents across the country. Based on these results, we feel we have a great understanding of the insurance marketplace and can quickly evaluate and structure your loan. Back to Top
Q. What if I have bad credit?
A. Unlike your local bank, your personal credit score is not the only factor in our review process. We do check your credit but we are more interested in the stability and quality of the book of business we will be lending against. Back to Top
Q. Can Oak Street Funding fund an acquisition of an agency or book of business?
A. Yes. In most cases OSF is able to use the seller’s block of business as the collateral for the loan, thus limiting the amount of out of pocket money needed for the acquisition or block of business and minimizing the effect on the cash flow of your current business. However, you are responsible for completing your own due diligence. Back to Top
Q. Is Oak Street Funding a direct lender?
A. Yes, OSF does act as a direct lender. We will help you structure and evaluate your loan alternatives and provide you with options so you can select the best structure for you. We do not have to find another financing source for your loan; we have funds available and we make the decision. Back to Top
Q. How long will it take to put financing in place?
A. All decisions are made at one location. The amount of time required to complete financing depends on the timelines of information provided by you and the respective insurance carrier(s). The typical financing, once all documents are in, can be completed in less than two weeks. Back to Top
Q. What kind of fees will I have to pay to complete a financing?
A. Once you have reviewed the financial terms with one of our Loan Officers and agree that we can assist, a fee of $500 is required; this amount can increase depending on the size of your loan. At time of closing, you are given credit for this fee to be applied towards closing costs and our commitment fee. The commitment fee is determined by the effort required by OSF to underwrite your loan. Back to Top
Q. What if Oak Street Funding is not interested in making a loan to me?
A. If you are not approved, no additional fees will be due to OSF. We work on helping you achieve your financing goals. That is our commitment to you. Back to Top
Q. What if I do not like the financing alternatives presented to me?
A. You are not required to accept any financing offer. If you do not accept financing, we are owed no additional fee. Before beginning the underwriting process, we determine the type, purpose and costs of financing for you, you pick the structure. We are very straightforward about what is and is not possible. Therefore, you will know ahead of time what we think is possible. Back to Top
Q. What are the steps involved in obtaining financing from Oak Street Funding?
A. The first step is our high-level review of your insurance policies that will be used as collateral for your loan. Based on this review, OSF will propose preliminary loan terms. Once you have agreed to preliminary terms, you are assigned to a Loan Coordinator who will guide you in gathering all required documents for our underwriting team. Once all required documents are received, you will be assigned an Underwriter who will work through the due diligence process. Once the loan documents are signed and approved, we will fund the loan proceeds. Back to Top
Q. What is your interest rate?
A. There are many factors that contribute to the interest rate, such as insurance carrier rating, product type, age of your book, annualized commissions relative to your requested loan amount, and credit score. To get more information, please select GET A QUOTE. Back to Top
Q. What length of terms do you offer?
A. Our terms vary by product, but typically they range from 1-12 years. Back to Top
Q. Will my policyholders receive any notice that I have borrowed against my future commissions?
A. No. There is never any contact with your customers. You continue to own and service your policies. Back to Top
Q. Can I “renew” or “re-borrow” before my loan is paid off?
A. Yes. Many of our customers have found this to be an excellent way to take full advantage of the value of a growing block of business. Several of our borrowers have requested a second or even third loan with OSF. When they understand how easy the process is they tend to come back to OSF. Back to Top
Q. What on-going commitments will I have with Oak Street Funding once I have a loan funded?
A. Customers are required to submit their commission statements so that OSF can reconcile the commissions paid on a monthly basis. There is a minimal monthly service fee charged in the loan that allows us to track how the book of business is performing versus our expectations. Back to Top
Q. How will Oak Street Funding purchasing my commissions help my agency grow?
A. You can use the funds from OSF’s purchase of your renewal commissions to reinvest in your business, purchase new leads or hire a new producer, generating even more new business. Back to Top
Q. How can I use my funds from the purchase?
A. When doing a loan from OSF, your funds must be used for business purposes, such as working capital, advertising, technology upgrades or even purchasing a building. Back to Top
Q. What is the timeline for a commission purchase?
A. Oak Street Funding will have a purchase completed typically within 30 days from the date all applicable documentation is received. Back to Top