Asset finance loan protection

Description

Our client runs a construction company and has recently taken out unsecured commercial finance to purchase machinery that can enable them to grow. The company recognised the importance of protecting their business in the event of the death of their sole director, and therefore, sought to take out a life insurance policy to pay the lender back in case of such an unfortunate event.

Key Challenges

The main challenge was to find a suitable life insurance policy that could cover the outstanding debts for the unsecured commercial finance loans as the machinery loans had different terms. Additionally, the policy needed to be affordable, as the company was investing in growth and did not want to commit too much of their cash flow to the premiums. The company was also concerned that they did not have adequate knowledge of the insurance market and were unsure of how to navigate the complex policy offerings.

Outcome

The policy provided a lump sum payment to the lender in case of the death of the sole director, which would enable the company to repay the unsecured commercial finance and continue with the growth plans. The policy was also affordable, with manageable premiums that did not significantly impact the company’s cash flow. Furthermore, it covered the different terms required by the different loans.

The successful outcome ensured that the company was well protected against the risks associated with the death of their sole director, providing peace of mind to both the business owners and the lender.