Business debt has been dominating UK business news for weeks. With retailer New Look announcing the closure of 60 stores throughout the UK, and electrical franchise Maplin’s closure of over 200, these serve a reminder to businesses to do all they can to protect their interests. One way to do this is Business Loan Protection which is a little like first-aid for businesses. But what is it?
Many businesses take out loans for start-up funds, or to expand their established business. The ability to pay back these debts often rests with a key individual within the business. Should something happen to this person, the business could be thrust into financial difficulty. This is where Business Loan Protection becomes a vital resource.
These policies act as life assurance, or life assurance plus critical illness policy for your business, so that when a valid claim is made, a lump sum is paid to help repay a debt. The obvious benefit of this policy is that a business is covered financially, usually following a difficult situation. Plus there are other benefits to consider:
- Business Loan Protection gives your employees peace of mind knowing that plans are in place to protect their jobs and their livelihood. This peace of mind may also shift into an increase in productivity, an increased level of staff retention and a heightened overall staff morale.
- The policy also reassures the key person whom the debt and future of the business relies upon. Easing the stress and pressures they are feeling will decrease the risk to health and provide a more positive atmosphere.
What is the probability a key person will become critically ill or even die?
According to MetLife, 21% of people have encountered long-term illness during their working lives. Research has also shows that 37% of directors expect companies to fold within 18 months of a death or critical illness of a key person.
In an ideal world, Business Loan Protection will never be needed for your business, but the risk posed to a business without a policy in place outweighs the probability of needing one.
At First Financial Solutions in Neath, we have experienced advisors who will make sure we completely understand your business and its needs to enable us to source the right policies for you. If you’d like more information and expert advice, contact us today on 01639 262222 or send us an email via this link.