Running a business often means taking financial risks such as loans, credit lines & supplier agreements are all part of keeping things moving.
But what happens if your business can’t pay its debts?
Many directors and business owners don’t realise that signing a personal guarantee (PG) on a loan could put their own assets (like their home or savings), on the line.
What is Personal Guarantee Insurance?
Personal Guarantee Insurance is an annual insurance policy that provides insurance cover for Personal Guarantees provided by Directors of Limited Companies in support of business loan facilities.
If the company enters insolvency, the Policy steps in and pays a set percentage of the PG commitment directly to the lender.
Asset Finance, Invoice Finance, Property Development, Business Finance, Overdrafts, Commercial Mortgages, Property Bridging
Premiums are based on the financial strength of the Limited Company the following aspects are considered by underwriters:
Shareholders funds, directors experience, lender, cashflow, profitability and trade sector.
What does the Insurance Policy provide?
- 80% cover for PGs signed in support of secured finance.
- 60% cover in the first year for PGs attached to unsecured finance, rising to 70% in year two, then 80% in year three and thereafter
- A maximum level of cover of £400,000 for secured loans and £300,000 for unsecured loans
- Unlimited access to the Business Support Service which provides invaluable support during financial difficulties.
- £10,000 cover for a professional debt negotiator to arrange settlement with the lender
- Cover for multiple Directors on one Policy at no extra cost if the PG is signed on a joint and several liability basis
- Cover for multiple guarantees on one Policy
What cover can you get?
The level of cover available is subject to whether the Personal Guarantee is attached to a Secured Business Loan or an Unsecured Business Loan, shown as follows:
- Secured Business Loans: (insurance available up to £400,000) 80%.
- Unsecured Business Loans: (insurance available up to £300,000) 60% year one 70% year two 80% year three and thereafter
The policy also includes up to £10,000 of Personal Guarantee negotiation fees under the Demand Mitigation Response Service
Key Features Include:
1. Competitive premiums and cover available across a wide range of business loans
2. Insurance available for: a. Existing or new Personal Guarantees b. Multiple Personal Guarantees c. One or more guarantors
3. Unlimited access to Business Support Services; a group of specialist advisors who are at your side should your business need support
4. Full quotation in minutes using the online quote and buy system or via telephone with one of their specialist advisors
Protect yourself before it’s too late
So, if you’ve taken out business debt and don’t have PG insurance in place, now’s the time to act.
One conversation could make all the difference between financial security and personal risk.
Why not message us today to arrange a quick call?
We’ll walk you through how PG insurance can help protect you, your home, and your family.
Giving you confidence that your personal future is secure, no matter what happens in business.
