Me & My Dog – Winter Sun

As I awoke on Saturday I was greeted by a beautiful vista of mist-drenched fields surrounding our home in Yorkshire. The air was still and the mist shimmered in the morning sun, reminiscent of a Norwegian fjord basking in the light.

Later that morning my dog and I were walking across the same mist-soaked fields. My mind started wondering and I found myself thinking about my business. As a business owner and entrepreneur, I hankered back to times when everything I touched turned to gold. In contrast I also recalled the haunting hour of 3am, unable to sleep worrying about bad results and rising costs seemingly beyond my control. It struck me that many diligent and dedicated business leaders must be besieged with anxiety, a by-product of declining revenue, a by-product of the current economic climate and Covid-19. When will there be an end to this wretched pandemic and its economic woes? Politicians and scientists alike seem divided, so how can businesses adapt?

In a perfect world, business leaders adapt companies by increasing sales to drive revenue. During lockdown this may not be a viable option. Some focus on cost reduction although this is easier said than done, especially if that manifests in painful redundancy of loyal staff. UK Government schemes; Furlough, Cebl and Bounce Back loans may provide some of the necessary capital, but if that is not enough are there other solutions?

As a former financier, my business partner recapitalised businesses via sale of strategic assets, raising equity and debt, MBO’s and or securing external investors from Angel and or Private Equity firms. Such solutions can provide a financial life-line addressing capital adequacy requirements and establishing a platform for future growth. The rewards can be great, but nothing in life worth having comes for free. Commercial lenders, Private Equity firms and Angel investors exist to make profit, whilst also protecting their investments from unforeseen events which could render a company bankrupt post investment.

To protect investments, lenders and investors may require Directors’ Personal Guarantees requiring Directors to repay loans should the business fall foul of unforeseen events rendering it bankrupt. Unforeseen events present in many guises. I have worked through the dotcom crash, 9/11, Gulf Wars, SARS and now Covid-19, all of which had a catastrophic effect on the economy and businesses. But how does it feel to be a company Director shouldering the weight of responsibility and pressure of a Directors’ Personal Guarantee. As a business owner I understand exactly how this feels. When businesses perform leaders can feel invincible, but when the tide of success turns – the pressure can be unbearable.

It comes as no surprise that stress associated with running a business can result in mental and physical health complications. Sadly, stress can lead to development of critical illnesses rendering the individual unable to work, or worse, death, perhaps as a by-product of a stress induced heart attack. In my career I have witnessed critical illnesses and premature death far more than I would wish. Against this macabre backdrop, why risk re-capitalising a business in the knowledge that investors usually require a Directors’ Personal Guarantee putting your personal assets such as family home at stake? In the event of death, or critical illness investors or lenders can force the sale of your assets to repay a debt. If those assets include your family home, the impact of such an event at a time of crisis for your loved ones can be unbearable.

As I reflect on my life, my father unexpectedly died aged thirty-eight from a heart attack. The pain associated with his loss was not limited to the emotional but manifested in a physical pain deep inside me. As terrible as the situation was, some relief was provided by a cash-payment from a life insurance policy. The payment provided liquidity to pay down my parents mortgage ensuring my mother was not forced to sell our home.

For those considering re-capitalising a business but worried about providing a Directors’ Personal Guarantee there is a solution. Business Loan Protection provides a cash-lump sum following a successful claim helping to pay-off financial liabilities whilst protecting your personal assets should you be diagnosed with a critical illness or worse. Just as my father’s life insurance policy offered my mother some relief at a time of turmoil, Business Loan Protection provides businesses the liquidity and breathing space to work through a difficult situation, stabilise the business whilst protecting your personal assets. In a world full of unexpected shocks and surprises, could you do more to protect your livelihood? Fatgreen Insurance helps protect shareholders, key staff and businesses from unexpected financial risks. Through a complimentary consultation we will understand your requirements and provide bespoke solutions to protect your business and loved ones.

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