125% year on year increase in loans secured with personal guarantee attached

July 2022: Purbeck Personal Guarantee Insurance, the U.K.’s first and only provider of personal guarantee insurance has published its Q2 2022 figures on the take up of Personal Guarantee backed loans by small business owners, based on the volume of personal guarantee insurance (PGI) policies sold.  The volume of finance deals has jumped 125% year on year and small firms are ploughing more cash into acquisitions and growth.

The data is the only reliable source of information on the finance being secured by UK SMEs which have personal guarantees attached where the risk to the business owners/directors personal assets has been mitigated through insurance.

• -    The volume of personal guarantee backed finance agreements in Quarter 2 2022, was 125% up on Q2 2021
• -    The volume of personal guarantee backed finance agreements in H1 2022 was 81% higher than H1 2021
• -    Investment in growth initiatives is the second most likely reason to secure finance. The volume of finance agreements secured for this reason in Q2 2022 has jumped 49% on Q1 2022
• -    Acquisition is the third most common reasons for securing finance with a personal guarantee attached and has seen a significant jump in volume – up 150% in Q2 2022 on Q1 2022
• -    Working capital remains the prime reason finance is secured 
• -    The average loan dipped from £174,540 in Q1 2022 to £150,682 in Q2 2022, a fall of 15.5%
• -    Unsecured loans remain the prime funding route making up 37% of business in Quarter 2 2022, a slight dip on 39% recorded in Quarter 1 2022.

Todd Davison, our MD said: “We are seeing significant year on year growth in the volume of personal guarantee backed finance being secured by UK SMEs and while Working Capital is the number one reason for securing finance, the number of finance deals to support investment and acquisition has grown considerably which certainly indicates a level of optimism amongst small business owners, despite the current headwinds. This is welcome news as we face a summer of political uncertainty and increasing cost challenges."

“Now that the UK Government has confirmed it is extending the Recovery Loan Scheme, for a further two years with personal guarantees remaining a core feature, business owners looking to take advantage of the scheme should think about how they can mitigate the risk. Personal Guarantee Insurance exists to protect the many small business owners who have taken the big decision to become personal guarantors whether lending is via a Government backed scheme or secured independently.”