Business Loan Protection
Many factors can affect your ability to repay a loan. So it makes good business sense to protect against those that may affect you directly. If your business has outstanding borrowings such as a bank loan, commercial mortgage, director loan accounts or if you have given the bank personal guarantees relating to the business then Business Loan Protection could help you.
What is Business Loan Protection for?
Business loan cover is designed to enable a business to repay specific debt if a key employee or business owner dies or is diagnosed as critically ill before the debt is fully repaid.
Loan cover can make sure a business debt secured on business assets or even your family home doesn't put your assets or home at risk.
The knowledge that your business has loan cover in place can offer peace of mind to everyone involved in the business and to your loved ones, as it reduces the chances of the family home being at risk if it has been offered as security for a bank loan.
What does Business Loan Protection cover?
The insurance policies that underlie a Business Loan Cover arrangement can either protect the business against the death of the employee in question or against the death or earlier critical illness of the employee in question.
If your business has borrowings, Loan Cover gives peace of mind over the term of the loan, making sure your business, family and even your home are safe: in the event of the critical illness or death, the insured loan will be repaid under the terms of the cover.
This is particularly important if you have offered your family home as security for a bank loan.
You can protect most types of borrowings, including bank loans, commercial mortgages and director loan accounts.
How does Business Loan Protection work?
We will design your Loan Cover to repay a specific debt if a key employee or business owner dies or is diagnosed as critically ill.
We'll explain the costs and benefits of all options as part of the process, ensuring you can confidently choose the cover best suited to your needs.
This case study is fictitious and for illustrative purposes only.
Do I need Business Loan Protection?
If you have business debt, you should also consider having Loan Cover. The consequences should something happen can be much more far reaching than you think: beyond potentially losing your business, you may also lose your home.
Different types of business debt can also have specific repercussions:
- Banks often specify Loan Cover must be in place with the policy often assigned to the bank.
- In the case of Director's Loan accounts, any balance owed to a Director in the event of their death must be repaid before the estate can be released.
- Overdrafts can be recalled by the bank at any time, often severely limiting working capital and requiring funds to be found immediately.
- Personal guarantees may mean that, if you were to die and your partner were unable to service the debt, your family's home may be at risk, leaving them in a precarious position.
The real question is: can you afford not to have it?
What are my options?
Ask Us - we make getting Loan Cover quick and easy because we ask the right questions, research your options and present a suitable, cost-effective solution.
You can be confident in advice provided by an experienced protection insurance advisor who draws on his Chartered Accountancy background to specialise in helping business owners address these specific issues.
We do not charge fees for our advice and policies can start from under £10 per month.
Call us on 028 3833 8000.