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Have you considered business loan protection?

Many people overlook business loan protection, but have you thought about what would happen if your family was left with the burden of having to repay your business loan? 

It is universally acknowledged that those in positions of responsibility are usually well advised to protect those under their wing with life insurance.  

Having quality life insurance arrangements in place can provide you with much needed financial protection for either a family or indeed a business during times of crisis; this could be death or a severe or terminal illness diagnosis.

You may have a business loan in place right now.

Why is business loan protection important?

You may have been required to provide the lender with a personal guarantee in order to secure this finance, perhaps even secured on your family home.

  • What if there are loans taken out in your name that would need to be immediately repaid in the event of your death or a severe illness?
  • Would your lender insist that any outstanding loans or liabilities are instantly repaid in such circumstances? 
  • Is your business currently or likely to be in a financially robust position to call upon liquid funds to repay any outstanding loans if they have to be immediately repaid?
  • Have you lent money to your own business by means of a Director’s or Partner’s loan account? Would this liability need to be settled on your death? 

These are some examples where lump sum life or illness insurance in the form of business loan protection could help you resolve this potential shortfall in your planning. 

Thomas Westcott Chartered Financial Planners advises individuals and businesses on their financial protection arrangements. Our team can help you understand the impact of not having adequate business protection arrangements in place. We can recommend bespoke and practical business protection solutions to fit within your budget.

How could you and your business benefit from our advice?

Our work in this specialist area can provide you with peace of mind that your successors in the business may not have to worry about future financial difficulties if a loan had to become suddenly repaid during a time of crisis.

Business protection could help protect your family’s financial security, especially if a business loan is secured under a personal guarantee or on the family home.

We can also help you ensure that any other financial arrangements (such as pension accounts) are correctly positioned for your family in the event of you passing away earlier than anticipated. 

We offer a free consultation and would be happy to speak to you to understand your needs in this critical area. 

For further advice on this matter, please do not hesitate to contact me or visit our Business Resilience & Protection Service page.

 

By Simon Lake, Chartered Financial Planner