In today’s blog we take a deeper look at Business Loan Protection. Business Loan Protection can ensure a debt is repaid if an owner dies or becomes critically ill.
Business Loan Protection is particularly important to small businesses where their profits rely on the owner(s). Or where the owners have given personal guarantees for the debt.
If an owner dies or suffers with a critical illness, the business may need an injection of money to ensure they can repay a debt such as a commercial mortgage, loan, credit card or overdraft. It can even protect a Director’s loan. If a Director’s loan account is not insured and the Director dies, the business may have to sell assets at short notice to repay the loan. If the business is unable to do this, the business could be forced into administration, leaving the Director’s family out of pocket.
Having an insurance policy in place can ensure:
- Premises are secured.
- Remaining owners, directors and employees are better protected from the financial consequences of the death or serious illness.
- Director’s families receive the monies owed to them.
Business Loan Protection is basically life insurance with or without critical illness cover.
This type of cover has taxation considerations and your accountant should be part of the advice process. We can work closely with all parties to ensure you understand the tax position of Business Loan Protection.
In summary, taking professional advice is crucial where a business has commitments.
For more information on this valuable protection plan and for advice on all areas of business protection, please contact us on 01455 63 61 63. https://onerooffinancial.co.uk/contact/
Blog written: 23/10/2024. The information contained within this blog was correct at the time of publication (23/10/2024), and is subject to change.
