Food & Drink1 min ago
What is underwriting? Please help!
2 Answers
What is underwriting? First of all let me explain why I need to know�I'm putting on a event and the event management company I am using to organise things said they can find a sponsor for the event to raise the initial funds needed, however they said you will also need to have and underwriter cover expenses. What exactly is underwriting, what's it for, is it like an insurance policy if the worst happens??? How much would it cost and how do they get paid? What would it cover? Do they take into consideration personal finances or credit history or is it based on a business plan etc? Do you know of any reputable companies that I could use? I know it's a bit vague and probably some stupid questions listed, but I've never come across this before. Please help, any advice would be much appreciated. Thanks
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Not a term that is usually used outside of mainstream finance.
The idea is that they require someone to cover the costs of the event because either the event management company is too small to be able to do so from its own resources or just prefers not to take the risk.
In this way, if all the exhibitors fail to pay them and nobody turns up, they have not lost money.
If you don't have the money yourself you could approach a bank but they will require a sound business plan for the event and will almost certainly want security (your house?).
Alternative ways of raising finance include advertising but that is akin to financial promotion and there are all sorts of laws to fall foul of there.
It may be better to find a group of friends who will join you in the venture.
Good Luck
The idea is that they require someone to cover the costs of the event because either the event management company is too small to be able to do so from its own resources or just prefers not to take the risk.
In this way, if all the exhibitors fail to pay them and nobody turns up, they have not lost money.
If you don't have the money yourself you could approach a bank but they will require a sound business plan for the event and will almost certainly want security (your house?).
Alternative ways of raising finance include advertising but that is akin to financial promotion and there are all sorts of laws to fall foul of there.
It may be better to find a group of friends who will join you in the venture.
Good Luck
In simple terms an underwriter essentially promises to cover the costs if it all goes horribly wrong. In commercial insurance for example, Lloyds underwriters are individuals who put up their own money to cover possible insurance claims. Obviously they make money from the premiums paid by the insuree, but if the boat sinks or the building collapses or the car is written off, then the underwriters are gonna be out of pocket cos they have to replace the boat or building or car. I don't know whether an insurance company would be able to help you.
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