The struggling economy presents unique challenges as well as growth opportunities for premium finance companies, which will have to manage a delicate balancing act to meet increasing demand for their services in this tight credit market while remaining aware that the deepening recession could lead to a greater number of delinquencies and defaults among commercial insurance clients, experts in the field warn.

Last year, premium finance players said the soft insurance cycle hurt business to a degree, because with prices dropping, fewer customers needed to finance their payments.

Indeed, Luther Grafe, executive vice president and chief operating officer of BankDirect Capital Finance--a premium finance company based in Lake Forest, Ill.--said last year that "we've seen premiums down as much as 30 percent from two years ago, so there are some clients who have historically financed their policies who now can pay cash."