Why you need stakeholder and business loan protection!

Why you need stakeholder and business loan protection!

Keeping your business on track is probably one of the most significant worries in your life. Securing its future and ensuring that your company continues to flourish is understandably a primary objective. However, have you taken the time to plan against unforeseen catastrophes adequately? What action can you take in the event of a crisis to enable your business to run as resourcefully as it did before?  The understanding for a business protection buffer creating such a pivotal safety net will provide you with peace of mind knowing full well that you, your employees and your customers are always safeguarded.

 

Have you adequately protected your business?

You may have chosen when setting up your business to have a partner by your side to share and navigate the confronts ahead. Bringing your unique skills together is what makes your business successful.

However, should your business partner unexpectedly die, the impact could be catastrophic? It will not just affect you but also the sustainability of your business as a whole. No one likes to think about the unimaginable happening, but have you considered what would happen to a business partner’s shares if they prematurely passed away?

The most likely scenario is that the remaining business owners, possibly you, will want to buy those shares to retain control of the business. But how would you do that? Do you have access to the sums of money needed to fund such a purchase at short notice?

If you or the surviving business owners are unable to provide the finances required, then the following could happen:

  • You could be forced to sell or close the business by the deceased’s estate.
  • The terms of any loans could be renegotiated by the bank or lender. You could even be forced to pay the loan back in full immediately.
  • The deceased’s family may become involved in the running of the business.
  • Potentially a competitor could try to buy your business.

It is also worth considering the what if; what if it was you that died?

Your family may have no interest in running your business or purchasing your shares. Wouldn’t it be better if you could financially protect them and ensure that they would receive a fair price for your shares to allow them to move forward and be financially independently supported?

 

Shareholder and business loan protection

Shareholder Protection provides a lump sum to the deceased’s family in exchange for their shares, giving you and the remaining directors reassurance that the business can continue in the manner it was intended.

If you have any business loans that are guaranteed by the shareholders, then business loan protection can help ensure that your company is financially prepared should the unexpected happen. Providing access to funds should the terms of your loan be renegotiated by the lender following the death of a shareholder or business partner.

If you’re not sure what the right protection is for you or your business, then consider seeking professional financial advice. A Lifestyle Financial Planner will work closely with you to help you find professional business protection that can be tailored to meet the needs of your business. Allowing you and your employees to look forward to a brighter future. You can also get further information about personal protection planning in Mike Robertson Associates’ free guide here, giving your family the gift of financial security.

Business Consultants based in East Sussex we service clients across the South East, Sussex and Kent, including smaller towns such as Ashford, Battle, Bexhill, Bodiam, Brighton & Hove, Cranbrook, Crowborough, Eastbourne, Hailsham, Hastings, Heathfield, Herstmonceux, Lewes, Mayfield, Newhaven, Rye, Seaford, Sevenoaks, Tenterden, Tonbridge and Tunbridge Wells.