Business Insurance Solutions

Suretyship Protection (Contingent Liability) Loan Account Protection Business Overheads Cover Keyperson Cover Debtors Cover Alternative Financing Corporate Investment Business Continuity (Buy-and-Sell) Income Replacement Loan Account Redemption Staff Retention

Loan Account Protection

When any business starts out, it requires financing to be able to purchase any essential equipment, stationery or other items, as well as to be able to pay the regular expenses like salaries, telephone expenses, rental, etc. When a business has no assets, there are only two ways to raise this financing, either by issuing shares or borrowing money. Because the owners do not want other people involved in the business, they normally rely on the loan method. The simplest route would be to go to a bank or other lending institution, but it is important to remember that they all ask for security and charge interest on any loan. If the business is not able to provide sufficient cash flow to meet this obligation, the alternative is for the owners and/or directors to make a personal loan to the business. The terms of such personal loans are normally done informally with no written contract, with no fixed term and do not reflect the payment of any interest. This is reflected on the balance sheet of the business as a long-term liability that only needs to be repaid at an indeterminable future date. The need: The need of the business is therefore to be able to repay the loan on demand if called upon to do so by the owner/director, or any other person like an executor who may be authorised to act. This might occur when the owner/director becomes disabled or passes away. If the business is not in a position to settle the loan at that time, it might be declared insolvent thus negatively affecting all concerned. Proper financial planning would avoid such consequences. The solution: The solution is for the business to insure the life of the owner/lender for an amount equal to the outstanding loan. This is a simple, inexpensive and efficient way of ensuring that cash is available at the required time.
Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Loan Account Protection Insurance Plandirect  By Financial Advisors & Brokers in RSA
© Plandirect. All rights reserved. Initiative by WP Brokers, an Authorised Financial Service Provider                        Legal Notices                        WP Web Solutions
Home Services Calculators About Contact

   Loan Account Protection

Loan Account Protection Insurance Loan Account Protection Insurance

Business Insurance

Life Insurance information, calculators & quotes Pre- & post retirement information, calculators & quotes Investment information, calculators & quotes Business Insurance information Last Will & Testament information, calculators & application Short-term insurance information & quotes Medical Scheme information & comparitive quotes Gap Cover information & application Home Loan information, calculators & application at ABSA, FNB, Nedbank & Standard Bank Contact an financial services advisor | broker | planner Needs & Solutions Contact an Advisor Contact an Advisor AFR