Business Loan Protection

Protect Your Company's Financial Stability in Times of Uncertainty.

Many businesses borrow to invest in their operations or cover ongoing expenses. However, would your business be able to manage its loan repayments in the unfortunate event of a key employee's or owner's death or diagnosis of a critical or terminal illness?

What is Business Loan Protection?

Business Loan Protection is a life insurance product designed to assist your business in meeting obligations such as outstanding mortgages, loans, or commercial mortgages in the event of a key person's death or critical illness.

In the event you lose a business partner, you may want to repay outstanding business loans, some of which may have personal guarantees and are required to be repaid when someone dies.

Key individuals will usually include business owners, directors, or employees possessing specialized skills.

Why Business Loan Protection is Important

Business Loan Protection helps to safeguard your business by ensuring that a debt secured against business assets or your residence doesn't jeopardize your personal assets or family home.

Having Business Loan Protection in place provides assurance to all stakeholders in your business and your family. This protects relevant individuals and their families from financial difficulty, especially if the loan pledged security for a bank loan.

Banks typically require Loan Cover to be in place, often specifying that the policy is assigned to the bank to mitigate their exposure to risk.

The sudden death of an individual by the bank can severely restrict working capital, necessitating the immediate repayment of loans and other credit facilities.

As the Personal Loan guarantor, your company or family members can face difficulties if the event of their death must be settled before their estate can be released to their family.

Personal guarantees may further amplify this risk, potentially putting your family's home or assets at risk in the unfortunate event of your demise, your partner is unable to manage the debt, saving them in a vulnerable position.

How Do I Set Up The Cover?

You will need to speak with an adviser who specialises in Business Protection. The arrangement is not as straightforward as buying some life insurance. We couple this cover to the business loan, but personally, as many other considerations come into play. The adviser will help recommend the most suitable term of cover and the amount of cover your business will also have some bearing on how the cover is arranged.

What Information Will You Need?

• Aside from your business details, we'll need to know the amount of the loan, term remaining, and details of your business's legal structure. If you're set up as a Limited Company, Limited Liability Partnership (LLP), or Scottish partnership, your adviser will need to collate 'keyman' or benefits in the application.

• If you operate as a sole trader, you will also need to submit a Declaration Trust deed.

• If you're applying as a partnership, you'll need to submit an application form, as well as a Partnership Protection Trust deed.

Rest assured, this is what we do, feel free to contact us for an obligation-free initial chat today.

At Vantage Health and Life, our consultants are here to guide you through the entire process, ensuring absolute peace of mind. Committed to delivering exceptional service and advice, we cater to both businesses and individuals alike.