Brokers missing out on commercial protection
The NACFB estimated new commercial lending to reach £727m in 2015 compared to £209m for residential as calculated by the Council of Mortgage Lenders.
But despite the size of the market Andy Coles, business director of SME insurer Lutine, reckoned business loan protection isn’t treated the same way as income protection by commercial lenders.
He said “Anecdotally we have seen no rise in the level of business protection sold since 2011 and brokers are largely missing out on this opportunity despite knowing their clients and businesses well.
“If you look at lenders’ websites you find no reference to business protection whereas all mainstream residential lenders will look to offer their customers insurance.”
Without business loan protection the ability to repay could be compromised if a key person was diagnosed with critical illness or died, while without shareholder protection in the event of death the shareholding may be transferred to the shareholder’s partner.
Many small businesses would also experience difficulty if they had to halt or even cease trading as a result of such unforeseen circumstances
In August YouGov found that a quarter of businesses (24%) hadn’t heard of business loan protection and a further third (30%) hadn’t heard of partner or shareholder protection.