Loan Participation

AgileCap is a specialty commercial lender focused on insurance agencies, in business for over 11 years .

Agency revenue is highly recurring. On average auto insurance customers stay on average ~7 years and homeowners ~19 years. About 80% of policies renew each year, so agencies have reliable renewal commission streams (only ~20% churn). In short, cash flow is quite steady.

Pretty much the same each year. For property & casualty insurance (home, auto, etc.), an agent earns roughly 10–15% of premium in commission both initially and on renewals. (Life insurance is different with heavy first-year commissions and tiny renewals, but AgileCap lends mostly on P&C where renewals are consistent.)

Very well. AgileCap reported no losses since 2020, after revamping their underwriting process ². Historically, before 2020, their annualized loss rate was about 1.27% (roughly 1.9% cumulative) ². In other words, defaults have been rare and minor, and performance has been strong in recent years.

Yes – all loans are floating, indexed to the WSJ Prime rate ². The pricing depends on risk: top-tier borrowers might get around Prime + 0.50%, but AgileCap’s typical loans price roughly in the Prime + 3.5% to +5.5% range ¹. (For context, with Prime around 8.25% in 2023–2024, that means borrowers paying ~12%–14% interest.)

They are generally fully amortizing business loans, usually with terms between 5 and 10 years.

AgileCap retains a piece of every loan. Peter Friedman emphasized that they hold the loans on their balance sheet and only sell participations in portions. Typically they keep anywhere from 10% of each loan (in some cases even more), so we are never brokering 100% away. Our bank partners have said they like that AgileCap co-invests alongside them.

Indirectly, yes – via borrower and third parties. All loans carry the personal guarantee of the agency owner by default ³. In some cases (like loans to Allstate agencies), there are contractual buyout options by the franchisor if a borrower defaults . However, AgileCap itself does not guarantee the participated loans. They rely on the strong collateral (lien on the insurance book) and the lockbox to secure the deal rather than offering a separate guarantee to participants.

A bank or institution that is willing to learn the insurance lending niche and engage in a long-term relationship ³. Peter Friedman said the best partner is one who will start with a deal or two, see how the product performs, and then scale up over time ³. They value a steady source of participations (multiple deals over years) more than any single large transaction.

Typically, the participant earns the same interest rate as the borrower pays, minus a servicing fee. AgileCap usually takes around 0.75%–2.00% (75–200 bps) of the interest as a servicing/origination fee ³. For example, if a loan is priced at Prime + 4% to the borrower, a participant might get roughly Prime + 2%–3% net. AgileCap mentioned 75 bps on a very large deal as an example, but 150–200 bps on smaller or riskier loans is common ³. This fee is often negotiable based on deal size and structure.

Acquisitions. The vast majority of AgileCap’s loans finance agencies buying other insurance books or agencies . The model is often a roll-up: by acquiring books, the agency increases its commission revenue base and profits. The industry knows that “larger = more profitable,” so owners are frequently acquiring smaller shops. (Occasionally loans might be for succession buyouts or debt consolidation, but M&A is number one.)

AgileCap handles all servicing and reporting. They have a robust system where insurance carriers pay 150% of the loan’s monthly payment directly into a lockbox account controlled by AgileCap before the borrower gets any funds. This means AgileCap receives and distributes payments to participants on schedule, and excess cash is forwarded to the borrower.