Premium financing has become a competitive necessity at the retail broker level—but MGAs and wholesale brokers are still leaving it on the table. For a channel that controls appetite, sets underwriting guidelines, and moves significant premium volume, that’s a meaningful missed opportunity.
This guide is for MGAs and wholesale brokers who want to understand how premium finance fits into their distribution model, what to look for in a partner, and how Patch works with the wholesale channel specifically.
How MGAs are different from retail brokers
A retail broker’s job is to place individual risks and serve end clients. An MGA’s job is different: you set appetite, write the underwriting guidelines, and distribute through a network of retail producers. That structural difference changes the premium finance calculus entirely.
- Concentrated volume: A single MGA relationship represents the combined premium of every retail broker in its network—potentially millions of dollars in financeable premium annually.
- Program consistency: Because MGAs standardize coverage terms across their programs, premium finance can be built into the quoting and binding workflow rather than treated as an afterthought.
- Underwriting influence: MGAs often have more flexibility than retail brokers to structure coverage and payment terms in ways that make financing cleaner—minimum earned premium clauses, cancellation provisions, and deposit requirements all affect financeability.
Wholesale brokers share some of these characteristics. You’re not writing on your own paper, but you’re controlling the submission flow and have ongoing relationships with both retail agents and carriers. That positions you to introduce premium finance at the point of placement.
The MGA endorsement model
The most efficient way premium finance reaches the wholesale channel isn’t through individual retail brokers discovering it on their own—it’s through MGA-level endorsement.
When an MGA selects a preferred premium finance partner and introduces that partner to its retail broker network, the multiplier effect is significant. One relationship at the MGA level can unlock dozens or hundreds of retail producers who now have a vetted, ready-to-use financing option for their clients.
This is the model that established players like IPFS and Ascend have used to scale distribution in the wholesale channel. Newer platforms like gotoPremiumFinance have built their growth almost entirely around wholesale and MGA relationships rather than direct-to-retail outreach. The logic is straightforward: distribution is expensive, and MGAs already have it.
For the MGA, the benefits go beyond goodwill with producers. A preferred-provider arrangement typically includes a referral fee or arranger fee—a small percentage of the financed premium that flows back to the MGA for each deal placed through the partner. At scale, that becomes a meaningful ancillary revenue stream.
What MGAs should look for in a premium finance partner
Not all premium finance companies are positioned to serve the wholesale channel well. When evaluating a partner, MGAs should prioritize the following:
- Competitive base rate: The finance rate is the primary variable that determines whether brokers actually use the product. A lower base rate means the all-in cost to the insured is more competitive, which drives adoption.
- Fast approval and clean broker experience: Retail brokers will not use a product that creates friction. Online quoting, same-day approvals, and a simple e-signature flow are the baseline expectation in today’s market.
- Referral fee or arranger fee structure: A typical arranger fee runs 1–5% of financed premium. Confirm how this is structured, whether it requires licensing in your state, and how payments are tracked and remitted.
- White-glove support for onboarding: Rolling out a new payment option to dozens of retail brokers requires more than a landing page. Look for a partner that will actively support broker onboarding, answer questions, and handle exceptions.
- Licensing coverage in your key states: Not every premium finance company is licensed everywhere. Confirm your partner can operate in the states where your program has the most volume.
How Patch works with MGAs
Patch operates as a preferred-provider partner for MGAs—not a white-label product. The distinction matters: Patch itself white-labels AIS (American Integrity Solutions) on the back end, which allows Patch to pass through a lower base rate to the retail brokers in your network. Your brokers can offer clients a more competitive all-in financing rate than they would get through most traditional IPFS or Imperial arrangements.
The preferred-provider model works like this: Patch establishes a relationship with the MGA, agrees on a referral or arranger fee structure, and then provides a co-branded or Patch-branded quoting experience that the MGA introduces to its retail producers. Brokers quote, bind, and manage financed policies through Patch’s platform. The MGA earns an arranger fee on each financed premium and gets reporting to track volume.
Patch is currently licensed in Texas, Florida, Illinois, California, North Carolina, and South Carolina. If your program has significant volume in those states, Patch can handle it today. Additional state licensing is in progress for MGAs with volume in other markets—reach out to discuss your footprint.
Because Patch is not asking you to white-label a new brand, there is no technology build required on the MGA side. The integration is relationship-driven: Patch handles the infrastructure, and your team introduces the product to producers through normal communication channels—emails, producer bulletins, or a mention in your next underwriting call.
For wholesale brokers specifically
Wholesale brokers operate primarily in the E&S market—placing hard-to-place, non-standard, or high-hazard risks that admitted carriers decline. That market segment has two characteristics that make premium finance especially valuable.
First, E&S premiums tend to be higher than standard market equivalents for the same coverage. A commercial property risk that a standard carrier might write at $8,000 in premium might land at $14,000 or more on an E&S form. The larger the premium, the more a client benefits from spreading payments over the policy term.
Second, E&S clients are often cash-constrained or managing multiple policies across a portfolio. Premium finance gives them a tool to manage cash flow without sacrificing coverage—which reduces the risk of mid-term cancellations that create headaches for everyone in the chain.
For wholesale brokers, the practical implication is this: premium finance should be part of your standard submission conversation. When you’re quoting a risk with a premium above $5,000, include a financing option alongside the coverage terms. It differentiates your submission from brokers who only present the gross premium, and it gives the retail agent something concrete to offer their client.
Getting started as an MGA or wholesale partner
The onboarding process for MGA and wholesale partners is straightforward. Patch will set up a preferred-provider agreement, confirm your state footprint, and establish the arranger fee structure. From there, your team introduces Patch to retail producers through whatever channel makes sense—a producer bulletin, an email introduction, or a mention in your next underwriting communication.
Patch handles producer onboarding directly: any retail broker in your network can create an account, get approved, and start quoting within a business day. There is no per-broker setup fee, no minimum volume commitment in the early stages, and no technology integration required on your side.
If you’re an MGA or wholesale broker with significant premium volume in Texas, Florida, Illinois, California, North Carolina, or South Carolina, contact Patch to discuss a preferred-provider arrangement.
Frequently asked questions
Does the MGA need to be licensed as a premium finance company to earn an arranger fee?
Licensing requirements for arranger fees vary by state. In most cases, an MGA can receive a referral or arranger fee without holding a premium finance license, but this should be confirmed with counsel in each state where you operate. Patch can provide guidance on how the fee structure is typically set up in the states where it is licensed—TX, FL, IL, CA, NC, and SC.
What happens if a financed policy is cancelled mid-term?
When a financed policy cancels, the unearned premium is returned to Patch as the finance company, and the outstanding loan balance is settled from those funds. Any remaining balance—or any shortfall if the return premium is insufficient—is handled according to the finance agreement terms. MGAs with minimum earned premium clauses on their programs should discuss this with Patch during setup, as it affects how cancellations are processed.
Can Patch quote across multiple policies in a single agreement?
Yes. Patch can finance multiple policies under a single premium finance agreement, which is common for commercial insureds carrying several lines—general liability, commercial auto, umbrella, and property, for example. This simplifies the payment arrangement for the insured and reduces administrative overhead for the broker.
How long does it take to get a retail broker network up and running on Patch?
Individual broker accounts can be approved within one business day. Rolling out to a larger network—say, 20–50 retail producers—typically takes two to four weeks from the time the MGA sends the initial introduction, accounting for broker onboarding, questions, and first quotes. Patch provides support throughout that process.
