Preparing an Insurance Agency Loan Package: Commission Statements and What Lenders Review
Agency owners spend their days assembling submissions for carriers: complete applications, accurate exposures and clear explanations that help an underwriter say yes. A loan request works the same way. When a lender receives an organized package with reconciled commission records, clear retention data and a well-explained plan, underwriting can move efficiently. When records are incomplete or inconsistent, questions multiply and timelines stretch.
This guide covers the insurance agency loan requirements lenders commonly review for acquisitions, book purchases, partner buyouts, owner-occupied offices and refinancing. It focuses on the documents and presentation. How lenders judge the quality of commission revenue itself is covered in our article on insurance agency commission revenue. Requirements vary by lender and program, but the core package is consistent.
The Questions Behind Every Request
- Can the agency repay? Documented cash flow and existing obligations.
- Will the revenue continue? Retention, carrier relationships and producer stability.
- Can the borrower run it? Insurance and management experience.
- What supports the loan if revenue declines? Equity, guarantees and liquidity.
1. Financial Statements and Tax Returns
- Business tax returns for recent years.
- Year-end profit and loss statements and balance sheets.
- Year-to-date interim statements compared with the prior year.
- Bank statements supporting revenue.
Tax returns, financial statements and commission records should reconcile. Explain differences in writing.
2. Commission Statements
- Commission statements from each carrier for several years.
- A summary schedule totaling commissions by carrier and year.
- Contingent and bonus commissions shown separately.
- Any chargebacks or return commissions.
- For agency-bill business, premium trust account reconciliations.
Commission statements are often the single most important supporting document in an agency loan request.
3. Retention and Book Reports
- Retention by year, line of business and carrier.
- Policy counts and revenue by line of business.
- Revenue by largest clients.
- For book purchases, a policy-level list with renewal dates.
4. Carrier and Producer Documents
- Carrier agency agreements, especially for the largest carriers.
- A plan for carrier appointments or consents after closing.
- Producer agreements addressing compensation and book ownership.
- A staff list with roles, licenses and tenure.
5. Debt Schedule
List every obligation: lender, balance, payment, maturity and collateral. Include seller notes from prior book or agency purchases, lines of credit and any short-term financing with daily or weekly payments. Omitting obligations damages credibility quickly. If existing debt has become a burden, see insurance agency debt restructuring.
6. Transaction Documents
- For acquisitions and book purchases: letter of intent or purchase agreement, seller financials and commission records, allocation of price and any seller note or retention-based payment terms.
- For partner buyouts: the operating agreement and agreed buyout terms.
- For offices: the purchase contract and property information.
- A sources and uses statement.
Due diligence findings often feed directly into the loan package. See our insurance agency due diligence checklist.
7. Licensing and E&O
- Agency and individual license information.
- The agency’s E&O policy and claims history.
- For acquisitions, the plan for licensing and coverage after closing.
8. Owner Information
- Resumes emphasizing insurance and management experience.
- Personal financial statements and tax returns for guarantors.
- Documentation of the source of equity.
- An ownership chart for related entities.
9. Business Plan and Projections
Explain the purpose of the loan, the transition plan and how the agency will perform afterward. Build projections from actual commission history, show the effect of reasonable retention assumptions for an acquisition and include a downside case, such as lower contingent income or the loss of a large account. Show how much working capital will remain after closing. You can test payment scenarios with our conventional loan calculator.
Presenting the Package
- Start with a one-page summary of the request, use of funds and repayment source.
- Organize documents in labeled sections.
- Reconcile commissions to deposits and tax returns before submitting.
- Keep interim financials current and designate one contact for follow-up questions.
If you are considering SBA financing, see our guide to SBA loans for insurance agencies.
Common Package Weaknesses
- commission statements missing for some carriers or years
- retention figures that cannot be supported by the data
- unclear book ownership or missing producer agreements
- incomplete debt schedules, especially seller notes from prior purchases
- projections that rely heavily on contingent income
Frequently Asked Questions
What documents do I need for an insurance agency loan?
Typically tax returns and financial statements, commission statements, retention reports, carrier and producer agreements, a debt schedule, owner information and transaction or project documents.
Why do lenders want commission statements if they have tax returns?
Commission statements show where revenue comes from, how it is split between renewal and new business and how dependent it is on particular carriers.
How can I speed up approval?
Submit a complete, reconciled package, disclose all obligations and address carrier and licensing plans early.
Prepare Your Agency Financing
US Professional Funding helps agency buyers and established insurance agencies prepare for acquisitions, book purchases, partner buyouts, owner-occupied offices, working capital and refinancing. Visit our insurance agency financing page to learn more.
