If your business has outstanding loans, such as a commercial mortgage, overdraft or a venture capital loan, business loan protection can act as a vital safety net, repaying your lenders in the event you or your business partners die or are diagnosed with a critical illness.
For most start-ups and growing businesses, it could be difficult to repay sizeable business loans at short notice if the business owner were to pass away. Business loan insurance is designed to pay out a lump sum to cover the cost of loan repayments and allow your business to operate as normal should the unexpected happen. At LDNfinance, our experienced, highly professional advisers are well versed in assisting business owners with the arrangement of business loan protection.
Your nominated LDNfinance adviser will take the time to understand your business and its financial circumstances. They will then clearly explain the insurance options available to you, with the ability to protect business loans ranging from commercial mortgages and venture capital funding to directors’ loans and personal guarantees.
Safeguard the personal assets of business owners with personal guarantees
In some cases, business loans require personal guarantees, with business owners using personal assets such as family homes as collateral to obtain the best possible commercial finance terms. Business loan protection offers peace of mind against the repayment terms of a personal guarantee in the event of a business owner’s death.
If the business fails following the death of a business owner and the company does not have the required capital to repay the outstanding loan, the deceased owner’s personal guarantee would ordinarily be activated, placing their personal assets at risk.
However, business loan protection can guard against the repayment terms of a personal guarantee, giving much needed comfort to the business owner’s family and financial dependents. Business loan protection plans may also have additional features, or optional add-ons, which may be subject to further underwriting and an additional premium. This includes providing benefits in the event of terminal illness, permanent disability or critical illness of the insured. It may also be possible to increase the value of the life cover over time to protect any additional business loans that may be taken out.
Let’s discuss your business’ unique circumstances and arrange bespoke business loan protection that gives assurances to your lenders and loved ones when the time comes.