You know the facts: Insurance agents are aging. The median age of a principal at an insurance agency, according to McKinsey & Co., is in the late 50s. And fewer than half of these agents have a perpetuation plan in place.

At Live Oak Bank, we’ve seen our fair share of business transitions. Some go well, and others, not so well. From last-minute changes to other bumps along the financing trail, there really are no guarantees.

In watching these transactions, we’ve learned an important lesson: Though it may feel overwhelming, perpetuation planning is not a mystery. Think of it as a sale to an internal rather than external buyer. The key variables are the same: Find a qualified and compatible purchaser such as a colleague or staff member, structure and price the deal appropriately and manage the transition smoothly. It’s essential to use the time prior to the transition to teach your successors all aspects of the agency.

What else do you need? Live Oak shares seven principles that are key to a successful perpetuation.

In addition, every agency perpetuation needs capital. Your capital empowers you to do a lot more than keep the lights and computers on: It’s the foundation for your future growth, as well as your protection during future economic downturns.

Interested in financing options for the insurance industry? Learn more about Live Oak’s competitive insurance lending product, consult our whitepaper “Insurance Professionals Guide to Finance,” in which Live Oak’s insurance lending experts break down everything you need to know.