London, February 2026 - New data shows a late surge in demand for personal guarantee insurance (PGI) among SME manufacturers in Q4 2025, highlighting growing caution as firms navigated funding decisions at the tail end of the year.
The data from <ahref="http:>Purbeck Insurance Services, the UK’s only provider of PGI reveals that while applications for PGI across the manufacturing sector remained broadly flat year-on-year in 2025, activity rose sharply in the final quarter. Applications in Q4 2025 were 10% higher than in Q4 2024, suggesting that increasing working capital pressures and preparations for 2026 prompted more directors to reassess their personal exposure to business borrowing.</ahref="http:>
The late uptick points to a sector that is continuing to borrow where necessary, but doing so with a sharper focus on risk.
45% of borrowing due to cashflow pressures
Purbeck’s data from Q4 2025 shows that almost half (45%)of PG-backed loans taken out by SME manufacturers were used to support working capital. Rising energy costs, employment expenses and raw material prices have made day-to-day cashflow management more challenging, particularly for businesses operating on tight margins.
A further 11% of borrowing was linked to stock purchases, reflecting the continued need to hold inventory in an uncertain and disrupted supply chain environment.
18% of loans for growth initiatives
However, the data also offers signs of cautious optimism.18% of loans were taken out to support growth initiatives, including expansion ,productivity improvements and strategic investment projects.
Personal guarantees get smaller, but risk remains
Alongside changes in borrowing behaviour, the size of personal guarantees being insured has also fallen. In Q4 2025, the typical level of PG cover dropped to £161,386, the lowest figure recorded in the past two years.
This reduction may reflect directors limiting borrowing levels, actively managing their personal exposure, or a combination of both. Despite this, the risk remains significant: 55% of loans were unsecured, meaning personal guarantees continue to play a central role in accessing finance.
As a result, personal guarantee insurance is increasingly being treated as a standard risk management tool, enabling directors to proceed with essential borrowing while protecting their personal assets should the business fail despite responsible management.
Todd Davison, MD of Purbeck Insurance Services says: “The rise in PGI applications in Q4 2025 suggests SME manufacturing firms are taking a pragmatic approach—protecting themselves personally while ensuring their businesses can continue to operate, adapt and, where possible, grow.
“Striking the right balance between funding progress and managing personal risk is likely to define many financial decisions in 2026.What is clear from our latest data is that personal guarantee risk has become a central part of the manufacturing finance conversation.”
