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Updated on February 19, 2025 By: Brian Krogol, CFO of Standard Premium Finance Holdings, Inc. (OTCQX: SPFX) www.standardpremium.com The insurance premium finance industry operates at the crossroads of finance and insurance, allowing customers to spread out the cost of insurance premiums through financing arrangements with companies like Standard Premium Finance. This specialty finance industry is a critical tool for individuals and businesses needing affordable payment options for high insurance premiums. Insurance premium finance companies enable insured parties, typically commercial entities, to pay insurance premiums over time instead of upfront. For many customers, insurance premium financing provides an opportunity to buy insurance without tying up working capital or accessing other credit sources. There are other customers who consider premium financing a necessity because they do not have the means to pay the premium in full at the time of purchase. Insurance premium finance companies, such as Standard Premium Finance, will finance the premium amount and charge an interest rate and fees for the service. This business model allows premium finance companies to generate revenue based on the interest rate differential between the rates at which they borrow and the rates they charge clients. Consequently, the overall revenue potential is closely tied to prevailing interest rates. Since profit margins are directly tied to prevailing interest rates, specialty finance, including insurance premium finance, is susceptible to shifts in macroeconomic factors. In a decreasing rate environment, where central banks lower interest rates to stimulate economic growth, premium finance companies face unique challenges and opportunities. The effects of a declining rate environment on the insurance premium finance industry, include impacts on revenue models, competitive positioning, and customer behavior