Most small businesses have some form of debt, be it overdrafts, loans or mortgages. These loans can help a business grow, but many businesses don’t have any form of insurance to cover this debt.
Protecting your Business Debt
Many business owners give personal guarantees or even use their own homes as security on business debts. But when a business borrows money from a bank or other financial institution, it’s common for the lender to want some form of protection to repay all, or some of that loan on the death of a key person. If the owner died, or was taken critically ill, these loans could become a liability.
If finance has come from a Director’s loan account, these loans have to be repaid in the event of the Director’s death. If the business does not have sufficient funds this could put severe pressure and strain on the business at a very difficult and demanding time.
What is Business Debt Protection?
Business debt insurance can cover any type of commercial debt including:
- Commercial loans
- Commercial mortgages
- Director’s loans
Any size of debt can be covered – the larger the debt, the larger the premiums will be. But for simple life cover, Business Debt Protection is extremely cost effective.
How does this protect your business?
Business Debt Protection provides the funds to ensure these outstanding loans can be repaid in full should the guarantor die and/or suffer a critical illness, allowing the business to continue with minimum disruption or even failure.
Benefits of Business Debt Protection
- Finance available to pay for any overdraft, loan or commercial mortgage
- Ensures your home is safe and secure
- Ability to pay for any Director Loan accounts which must be repaid upon death.
- Protects your business without putting you or your partners/directors at risk
Business Continuity Planning
Business continuity planning plays a key part in protecting the stability of your business. It ensures your business continues to trade even if the unexpected happens. Business Debt Protection is just one area of business protection. You might also want to consider Partner & Shareholder Protection. Without this type of cover in place, if the shareholder dies their shares could go to someone with no interest in your business. There’s also Key Person Protection to protect your business against the loss of a key person and tax efficient Relevant Life Cover which makes staff feel more appreciated so they’re more likely to stay with your company for longer.
Find out more. Download our business continuity guide.
Why choose The Finance Roome?
We understand the complexities of business continuity planning and depending upon whether you’re a sole trader, limited company or partnership, our business protection team can advise you on the most cost-effective options for your business. We listen to your specific needs before searching hundreds of business protection products to find one that matches the individual requirements of your business.
Don’t just take our word for it.
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