There are around 45 million private sector businesses in the UK of which 99% operate with less than 50 employees.
- 43% have unprotected corporate debt
- 39% say their business would fold within 18 months of death or critical illness of a key person
- 33% have no shareholder protection
- 58% have no formal agreement to deal with death or critical illness of the business owner
The implications of this gap in protection of debt and key people are significant on both the business and the family.
If debt needs to be repaid there could be a forced sale of assets, lenders could lose confidence in the business which could impact future borrowing and lead to reputational damage.
If the worse happens to a key person there will undoubtedly be a loss of profit and a recruitment cost which will interrupt cash flow and could mean a reduction or removal of dividend.
In addition to the impact on the business the surviving spouse and any dependents will require financial security.
Some key things you should consider are….
- How do you manage your business risk?
- Does your business depend on the performance of some key people?
- Does your business have debt that is supported by these people?
- What happens to control of the business if a shareholder dies or becomes critically ill?
- When was the last time you reviewed where your business risks are and any arrangements that are in place already?
At Fraser Heath we can work with you to provide a business risk analysis to review both the business and family needs. We can then recommend a suitable course of action protect all parties involved.
As Independent Financial Advisers we are required to consider the whole of market when looking for a suitable product to meet clients’ needs.
Please contact us
for more information as to how we can help.