Is your business under threat

There are currently 5.4 million businesses in the UK with circa 95% employing 10 or less people, and most having an ownership structure of 3 or less people with an average age of 48.
With SME’s size of operation therein lies an inherent danger, it is incredible that business owners take out phone or pet insurance but fail to protect their business.
In any small business there will be at least one “key person” who if lost through death or critical illness could be devastating to the business in terms of loss of profit and the cost of replacement and could end up in business failure.
This can be prevented by putting key person insurance in place.
Business debt such as bank loans & mortgages need to be insured, but a lot of company Directors are unaware of the fact that Directors loans also need to be covered as these are repayable in the event of death. With an average Directors loan size of £229000 how many could say that sum would be available on demand, and if it is currently will it still be so in the future when needed?
57% of SME’s have borrowings averaging £344000, ask yourself what will be the approach adopted by a Bank in the event of the death of a Director or a key person?
A lot of limited companies are trading without having any form of share protection in place which in the event of the death of a Director could disadvantage the business and the connected families, share protection plans written into an appropriate trust are the answer.
It is also possible to protect families via a business with “Relevant Life Plans” with the business paying the premiums and obtaining tax relief.

For advice on any of the above issues or a review of your business please contact us by any method listed below.

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