A business recovery specialists, Cranfield, is offering added support aimed at directors of all size companies to help them minimise their personal financial risks when investing in their own companies.
One way of protecting personal investment in a business is through a Director’s Debenture. Should a company then find itself in trouble a debenture will give the director a higher priority if the company is wound up.
Tony Mitchell, Cranfield’s managing director, has seen the effect a business failure can have on company owners and directors. He said: “Business owners who are not protected risk losing their homes and other personal assets, which affects them for many years. Seeing your company fail is one thing, but to also lose your personal assets too as a result of this is a doubly devastating blow.
“We urge directors across the region to consider the worse case scenario, even if their business is currently very solid. Putting a Director’s Debenture in place is a straightforward process and the earlier directors think about this the better.
One such company director who wished he had taken this advice is being forced to sell his home as a result of the current recession after having to place his company into Administration. He said “It was only after I had consulted Cranfield that I learnt about a Director’s Debenture. Had I known about this at the time I remortgaged my house and invested the money in the company I wouldn’t now have to be selling my house to repay the money I borrowed.”