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 Posted: Mon Jun 15, 2009 11:51 pm Post subject: Financing a book of business? |
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can anyone give me a general idea about purchasing a book of business for Allstate? How does the financing work? How much can someone get approved for? The book we are thinking of buying is 1.65 million in premium and is being sold for $425,000.
How long do people typically finance for ten? fifteen years? and what percentage point of interest would I be looking at?
I realize these are very general questions and everone's circumstances would be different. My husband and I have excellent credit ratings and he has worked for Allstate for almost four years as a p&c producer.
Thanks for all of your help!!
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Guest
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| Posted: Tue Jun 16, 2009 6:51 am Post subject: |
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Hi there..
I guess you're looking forward to buy an Allstate agency.
Did you consult with any of the Allstate-exclusive independent agents?
Whenever the agency relationship of such agents come to an end, they may sell the book of business (customer accounts) that they've generated under their agreement with Allstate. So, all you'd need to be is an Allstate-approved buyer!
But there's one thing, do you know that Allstate won't be a party to such agency sale? Roddick |
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roddick
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kelvin
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| Posted: Wed Jun 17, 2009 1:08 am Post subject: |
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Thanks for all of your responses. Honestly, my dad and brother have both been top agents in the region for Allstate. However, my husband is working at brothers agency and wanted to get some further info from outside sources before we get into the nitty gritty.
Brother purchased agency from my father (and financed through him) so .....how do you get financed if not through the seller? this particular agency we are looking at is moving out of state to buy another agency there. do you need to have thousands of dollars down? or can you get full financing for $425,000 price tag....? i read online of outside sources such as oak street funding? is this the route to go or just go to a bank?.....
thanks in advance for the help!!
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Guest
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| Posted: Wed Jun 17, 2009 8:14 am Post subject: |
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Hi Guest,
There are lenders who would offer you finance. But you need to find the right lender. Not all lenders would be appropriate or available to finance an agency.
However, how big is the agency? What is the volume of business they have? |
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jeorge
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| Posted: Wed Jun 17, 2009 9:04 pm Post subject: |
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I am not sure how many policies they have in place...but it agency premium is 1.65 million. Would you say that is a medium size agency?
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Guest
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| Posted: Thu Jun 18, 2009 4:21 am Post subject: |
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Okay Guest, now please ask yourself the following questions:
Would this agency be able to provide the amount of salary you are looking for?
Don’t look at cutting your present income. It’s really hard to adjust at lower income once you’re comfortable at certain lifestyle.
What would be the overhead expense?
You would incur certain costs like-rent, staff, managing paper-work and like which you need to keep in mind while deciding about buying agency.
The residual income would go towards repaying the loan.
Is this agency satisfying all your requirements? |
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jeorge
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| Posted: Thu Jun 25, 2009 1:26 am Post subject: Allstate Agency |
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Oak street only lends to an outside buyer up 1.5 times the termination payment. PPC is crap also. They will lead you on, but never approve any outside buyers unless you have the purchase price sitting in your bank account. Allstate bank is the best in most cases. 10 years at 10% interest and you must put 10% down. Good Luck
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Allstater
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| Posted: Thu Jun 25, 2009 7:27 am Post subject: |
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Hello Allstater and welcome to the ampminsure community. 
| Quote: | Allstate bank is the best in most cases. 10 years at 10% interest and you must put 10% down. Good Luck
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That's what I too have heard.
Anyway, can you please elaborate for us the criteria that an agent should meet to qualify for Allstate financing? |
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jeorge
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| Posted: Thu Jun 25, 2009 4:47 pm Post subject: |
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I am seriously considering this as well...
I believe Allstate bank looks at your personal credit rating and the ret & loss ratio's. The business also has to cashflow with a reasonable living wage to the agent. With the huge loan payment, the cashflow can be tricky without putting a lot down.
My main concern right now is what if Allstate makes any changes in how they operate with agencies. For example, changing commission structure or making agents employees and buying back books at TPP (like they did in Canada not too long ago). If they did that, you (or I) would be in debt for the difference in what you paid and what TPP is.
Also the US economy is a concern... |
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djohn
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| Posted: Mon Jul 20, 2009 9:19 am Post subject: TPP |
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I myself am about to enter into the 'negotiating' phase with the book I am after. Does anybody know how Allstate structures TPP for agents that voluntarily/involuntarily take it? Fixed payments spread out over five years? Three years? 100% up front? Looking for some information to finance this so that it doesn't pinch me...hard.
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Gu3st
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| Posted: Mon Jul 20, 2009 9:22 am Post subject: TPP Addendum |
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Would prefer an answer from someone who knows it. Can't afford a guess, qualified or otherwise.
Thanks ladies and gents! 
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Guest411
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| Posted: Tue Jul 21, 2009 11:27 am Post subject: |
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Hopefully you would soon hear from the visiting agents of this board. Just hang tight
Meanwhile, are you approved? I think an Allstate agency buyer needs to be Allstate approved before they can actually get into the process of acquiring Allstate agency. |
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kelvin
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| Posted: Tue Jul 21, 2009 9:08 pm Post subject: |
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Not approved yet. Going through the mountain of paperwork now. Don't expect to NOT be approved. Have family with Allstate and am financially in good position.
As it was explained to me, Allstate takes the TPP sum and breaks it into monthly payments for 12 months. It is taxed as if it is a payroll check. Would appreciate it if those 'in the know' can confirm/deny this.
Cheers!
Thanks!
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Guest411
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| Posted: Wed Jul 22, 2009 1:08 am Post subject: TPP Payment |
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This may be new or state specific but my understanding is the termination payment is paid over 2 years. This ensures you will not violate the non compete agreement and take all the customers. If you violate the agreement they just keep the rest of your payments! The termination does not count any business written before the year 99/00 independant changeover.
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allstater
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