What is Business Loan Protection?
The inability to pay off business debts such as loans, commercial mortgages and overdrafts should a key person pass away or suffer a critical illness can lead to financial difficulty for business. It can even lead to the closure of the business or personal guarantees being called in.
By arranging business loan protection, a sum would be paid to the business in the event of a key person passing away or suffering a critical illness. This will enable the company to repay any debts accounted for by the policy. Some commercial lenders insist business loan protection be in place but even if they don’t, it is something which everyone with business debts should consider.
You may have given the lender a personal guarantee, such as your home, in case the loans cannot be repaid. It is therefore important to ensure the debts would be paid off if you passed away in order to ensure your family are not affected.