Due to the current COVID-19 pandemic, businesses have been severely disrupted. Some business owners have been left with no choice but to take out loans to prevent the business potentially becoming insolvent. Currently, business owners face risky options to secure these loans. These options include the giving of a personal guarantee or the charging of personal assets such as their family home in order to secure the borrowing. Giving such guarantees obviously comes with significant risk to the business owner and their family especially if they need to use the family home as security. However, there are steps that business owners can follow to protect themselves. These include the business owner taking out personal guarantee insurance (PGI). This is a type of insurance product which will pay out up to 80 percent of a business owner’s personal liability in the event that a lender enforces its guarantee.
Options are available to business owners in this situation and if they take bespoke legal advice early on, they have a much better chance of safeguarding themselves and their families.
The article was originally published by eprivateclient on 05/05/2020 please click here to read the full article.