

Posted by Todd Davison on
April 2024: As the Federation of Small Businesses (FSB) calls for a more comprehensive investigation into the use of personal guarantees for small business loans, the number of small business owners becoming personal guarantors continues to rise. According to new analysis of applications for personal guarantee insurance in Q1 2024, by Purbeck Personal Guarantee Insurance, the UK’s sole provider of insurance protection for personal guarantees, there has been a 49% rise in business owners seeking Personal Guarantee Insurance (PGI) for a small business loan. And most of these were for loans to simply keep their business running.
Key Facts:
Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “Our latest data should make interesting reading for the Federation of Small Businesses (FSB) and the Financial Conduct Authority (FCA) following the FSB’s Super Complaint regarding personal guarantee requirements for small business loans.
It is clear that personal guarantees have become part and parcel of small business lending and with the average personal guarantee at over £157k, (£162K in construction) based on our figures, the requirement for security from lenders is significant.
The key issue is whether a personal guarantee is appropriate and proportionate to the loan being offered. Additionally, business owners need to know what they are getting into so greater education on the risks and how to mitigate them is vital. We look forward to seeing the outcome of the FCA’s investigations and what further actions are taken to help make personal guarantee requirements fair and legitimate.”
For more information or to speak to one of our underwriters contact us today.