Business loan protection

Any independent financial adviser will tell you that running your business takes a special commitment and responsibility. Much of your success depends good financial planning, meeting your financial obligations and reducing your risks wherever possible.

As a small business owner you will recognise the importance of credit in building your business. But what will happen to your business if something happens to you or one of your business partners? Even a few months without income can drain your resources and prevent you from meeting your financial obligations.

For most of us, the risk a critical illness, permanent disability or even suddenly dying is the last thing on our minds. But if you died suddenly and left behind an uninsured loan, your family, beneficiaries or business partners may face the additional financial burden of repaying that loan.

Resources you put aside for other purposes may have to be used for loan payments. If an overdraft, loan or commercial mortgage is unable to be repaid due to the loss of a key person, it can have huge implications for the business.

When a business takes out a loan, it needs to ensure that the repayments can be met no matter what happens to the business or its individual owners. business loan protection will ensure the business loan can be repaid in full upon death or diagnosis of a specified critical illness of the life insured.

Several issues can arise if a business loses a key person such as a director:-

• If a director or other key person provides a personal guarantee for the business loan, their family’s future could be adversely affected if the business were to default on payment as the key person’s estate could be drawn upon to help repay a loan if they were to die prematurely
• In addition to the operational issues faced by a business losing a key person, its future may be vulnerable if loan repayments can no longer be met due to a downturn in business

Business loan protection will ensure the business is protected against situations like these that could cause a business to struggle to carry on with its day-to-day operations and make debt repayments on time.

Premiums vary across providers so fee based independent financial advice is essential.

Any questions on business loan protection?

Please don’t hesitate to call us on 01582 839280 or Email us.