Matthew Cole of TJ Vickers urges traders to get protected if they have to sign a Personal Guarantee

As car dealers bring staff back from furlough, it is anticipated there will be a rising demand for loans to help pay wage bills but access to funding will increasingly depend on the business owner providing security in the form of a personal guarantee. Matthew Cole, Director at TJ Vickers, one of Shropshire’s oldest and most successful family run main dealers is urging regional car dealers who face this dilemma to consider Personal Guarantee Insurance.  Matthew had the foresight to secure insurance prior to the pandemic.

Todd Davison, MD of Purbeck Insurance Services, provider of the UK’s only Personal Guarantee Insurance solution says: “We anticipate that lenders are going to be much more risk averse than they were prior to the pandemic. It is likely that new finance will be heavily dependent on a business owner’s willingness to sign a personal guarantee – effectively putting their personal assets on the line if the business fails.  After months of worry and uncertainty this is not what motor traders need.  However it is important the owners and directors or car dealers understand that a personal guarantee doesn’t have to be a barrier to getting the finance they need.  Personal Guarantee Insurance can cut the risk, paying up to 80% of the outstanding loan amounts due if the business fails.” 

Matthew Cole of TJ Vickers said: “TJ Vickers has been established in Shropshire since 1962.  The last few months have probably been the most challenging in our history.  While we have been able to sustain the business using the Furlough scheme as well as some rent and VAT deferrals, it made a big difference knowing that personal guarantee insurance was in place in respect of the security required by our bank.  It has given myself and my business partner huge peace of mind, knowing that if the business did fail, the bank would not be coming after my home and other assets.

“We actually enjoyed a very successful June, which I believe was consistent with performance throughout our industry. Sales were up on the previous year and, although the final accounts are not quite completed, it looks promising. July has started on more of an even keel.  However, sourcing stock remains challenging. It is difficult to predict trading conditions over the next 6-12 months, there are many uncertainties ahead so our strategy is to keep delivering a great service and keep a very close eye on cashflow which is stable.”

Todd Davison, MD of Purbeck Insurance Services continues: “It is crucial dealers seek expert advice regarding business loans from members of respected trade bodies such as NACFB or FIBA and investigate ways to mitigate the risks such as using Personal Guarantee Insurance.

“In addition to insurance, there are a range of measures business owners should consider to cut the personal risk they are taking.  Signing a Personal Guarantee is never a decision to be taken lightly but as long as you mitigate the risks it should not be an insurmountable barrier to securing new finance.”