Even before millions of businesses took a financial hit due to coronavirus, over half of UK companies had some form of debt, owing an average of £176,000 each. Despite this, just 20% had an insurance policy in place to protect them if they were unable to pay their debts6 . Since March, however, businesses have borrowed over £58bn through government-backed coronavirus loan schemes, according to Treasury figures7 – meaning that UK businesses are now more heavily indebted than ever.
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Even before millions of businesses took a financial hit due to coronavirus, over half of UK companies had some form of debt, owing an average of £176,000 each. Despite this, just 20% had an insurance policy in place to protect them if they were unable to pay their debts6 .
Since March, however, businesses have borrowed over £58bn through government-backed coronavirus loan schemes, according to Treasury figures7 – meaning that UK businesses are now more heavily indebted than ever.
Protecting your business
If you have taken on more debt to keep your business afloat during the pandemic, you’re certainly not alone. If you didn’t have an insurance policy in place prior to lockdown, such as a business loan protection policy, it’s all the more important you do so now.
Business loan protection
There are several types of business protection, one of which specifically pays out if companies find themselves unable to repay loans such as commercial mortgages, business loans or director’s loans. This could happen if, for example, one of the company’s directors were to die or develop a serious illness. A business loan protection policy, therefore, takes the form of a life insurance or critical illness policy (or sometimes both), which will provide funds to repay the business' debts if the worst were to happen. If you’re a business owner, you may have used your own personal assets, such as property, as security for a business loan. If so, not only you, but your loved ones, could face financial hardship if you are not insured.
Keep your business safe
Many businesses have unfortunately lost their battle for survival this year – don’t let yours be one of them. We can help you find a suitable policy that protects your business against the unexpected.
by Daren Wallbank, Chartered Financial Planner
6 Legal & General, 2018
7 UK Treasury, 2020
