Applications for Personal Guarantee Insurance are rising in 2025. Learn why and how to ensure your business and assets are fully protected.
When you’ve worked tirelessly to build your business, weathering the ups and downs and pushing for every bit of progress, a personal guarantee can feel like the next step forward. It’s the gateway to new funding, which means new opportunities and continued growth.
But signing that guarantee changes things. It’s no longer just your company on the line; it’s your home and your savings. Suddenly, that signature carries a lot more weight.
You’re not alone in feeling that pressure. At Purbeck, we’ve seen a sharp rise in personal guarantee insurance (PGI) applications year on year, as SME directors look for ways to protect themselves from the personal fallout of business borrowing. And that upward trend hasn’t slowed down.
In 2025, heightened caution among lenders, persistent inflation pressures, and tighter credit conditions have led to another surge in both personal guarantee-backed lending and PGI applications. It’s clear that more SME directors are recognising the importance of shielding their personal assets.
This blog explores why demand continues to grow, what it means for SME directors, and how businesses can ensure their assets are protected in this changing market.
What is personal guarantee insurance (PGI)?
A personal guarantee is a legal commitment made by a company director or business owner to personally repay a business loan if their company is unable to do so. While this reassurance helps lenders feel more confident in providing finance, it also exposes directors’ personal assets - including their home and savings - to potential risk.
That’s where personal guarantee insurance comes in. PGI helps to protect directors from this personal liability by covering a significant percentage of the loan amount if the business defaults. In other words, it ensures that business finance doesn’t put your financial future in jeopardy.
Importantly, PGI isn’t just a safety net; it also enables directors to secure funding with confidence, knowing that they have protection in place should the unexpected occur.
Why PGI applications are still rising in 2025
The increase in PG Insurance applications through 2025 reflects the ongoing changes in how SMEs access finance and the growing awareness among directors about personal exposure.
- Stricter lending requirements
Traditional banks and alternative lenders alike are tightening criteria, particularly as interest rates stabilise but remain high. As a result, personal guarantees are now a common condition of many business loans, from working capital facilities to asset finance.
- Economic caution
Even as inflation cools, economic uncertainty remains. Directors are more cautious about their personal liability and are proactively seeking ways to reduce risk, leading to more enquiries and applications for PGI.
- Growing awareness among advisers and brokers
Accountants, financial advisers, and commercial finance brokers are increasingly educating clients about personal guarantees and recommending PGI as a vital part of responsible financial planning.
Purbeck’s own insights show that directors are no longer viewing PGI as a niche product, but as a standard part of prudent business management. Data and industry sentiment suggest that as personal guarantee-backed lending continues to rise, PGI will become a mainstream necessity for UK SMEs.
What this trend means for SME directors
This ongoing rise in personal guarantee-backed lending has direct implications for directors:
- More directors are personally exposed to potential financial loss if their business struggles or defaults.
- Many may not fully understand the level of risk they’ve taken on - or may not even realise they’ve signed a personal guarantee as part of their lending agreement.
- Directors should take time to review their existing finance arrangements and understand what guarantees are in place.
Consider this example:
A director signs a personal guarantee for a £150,000 business loan to fund growth. If the business later encounters financial difficulty, the lender can pursue the director personally for repayment. Without PGI, that director’s home and savings could be at risk. With PGI, a large portion of the liability would be covered, protecting their personal finances and giving them critical breathing space.
This scenario highlights why Personal Guarantee Insurance is an increasingly important safeguard - especially for directors operating in industries vulnerable to cash flow challenges such as construction, manufacturing, or property development.
How Purbeck is supporting this growing demand
As the UK’s leading specialist provider of PGI, we’re at the forefront of supporting SME directors through this continued rise in applications.
- Tailored cover: we provide bespoke, director-specific policies rather than one-size-fits-all pricing.
- Flexible protection: options include partial or full cover depending on the guarantee amount and loan structure.
- Added value through expert support: every Purbeck policy comes with access to the Business Support Service, offering practical help in areas like credit control, debt management, and recovery advice.
- Trusted and regulated: we are FCA-regulated and backed by A-rated insurer Markel International, ensuring clients’ confidence and peace of mind.
Is your business protected?
As more lenders demand personal guarantees, now is the time for directors to take stock and assess their position.
Ask yourself:
- Have I signed a personal guarantee for any business loan or finance agreement?
- Do I currently have Personal Guarantee Insurance in place?
- Does my existing cover align with my company’s current financial exposure?
If the answer to any of these questions is uncertain, it’s worth exploring PGI as a priority. Even if you’ve already taken out business finance, protection can still be arranged, helping to shield your personal assets from potential risk.
Protect what you’ve worked hard for
More SME directors than ever are choosing to protect themselves with PGI and for good reason. As personal guarantee-backed lending becomes the norm, having cover in place isn’t just wise, it’s essential.
Contact our team of specialists today for a quick, tailored quote based on your guarantee and loan details, ensuring you have the right level of protection for 2025 and beyond.
