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Hayley Towlson, Our Financial Services protection expert, discusses the affects of the coronavirus pandemic and how she can help you protect your business.

Many small start-up firms, or SME’s (Small Medium Enterprises) will no doubt have had to take advantage of the Bounce Back Loans and the Coronavirus Business Interruption Loan Scheme (CBLS) on offer from the government following the coronavirus pandemic.  This will have left many businesses with more debt to keep themselves afloat during difficult times.  Research recently carried out by Sage highlights a growing debt burden and redundancy ‘time bomb’ weighing heavily on the SME outlook for 2021.

Carrying business debt is essential to keeping a business running, but what comes with this is financial uncertainty.  More debt, with less protection, leaves businesses vulnerable.  Half of SME’s have taken out some form of coronavirus related loan, leaving an average additional debt burden of £173K per year once repayment begins – only 63% are confident in their ability to repay

I often ask my clients the following: ‘If a key person of your business was to become seriously ill, or worse still, they were to pass away, would the business survive?’  It is crucial to the running of your business to assess what financial hardship could lie ahead.  Would you be able to replace the ‘key person’ to maintain debt repayments and continue to generate profits within the business?  I have seen first-hand, on many occasions, charges made on a main residence and personal assets as a condition to a bank loan for your business.

A simple way to offer peace of mind and reassurance that your business can survive during difficult times and that in turn your personal assets are not put at risk, is to implement business protection.  So how do you know how much cover is needed?  There are many things to consider for your specific business and circumstances.  There are no specific rules when assessing the financial value of a key person, but there are many elements to consider.  I have worked in the business protection industry now for 11 years, and I am confident that there is no ‘one size fits all’ approach.  The key to understanding the implications to you and your business is a full review, which is complimentary, so please feel free to get in touch and find out how I can help you.