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SMEs are more likely to be asked to put personal assets on the line

Posted by Todd Davison on Jan 17, 2020 1:00:23 PM


Survey reveals demand for personal guarantees from lenders rises by nearly 50% in past twelve months

Lenders are increasingly asking SMEs for personal guarantees to secure business finance a survey[i] has revealed. The survey of commercial finance brokers undertaken by Purbeck, the UK’s only personal guarantee insurance solution for the owners and directors of UK SMEs, found 47% of respondents said they had seen a rise in demand for personal guarantees as part of a new business finance package, in the past year.


This is further evidenced by the fact that Purbeck saw a 173% year on year increase in demand for personal guarantee insurance in October 2019, with a record peak that month in new policies underwritten. 

The survey findings suggest that while the Government is encouraging lenders to sustain access to finance for small businesses, the reality is that lenders are tightening their lending criteria, increasing the pressure on business owners to put their personal assets on the line in order to access that finance. 

The study also revealed that 49% of brokers anticipate demand for finance from SMEs will increase if the UK leaves the EU without a deal in 2020.  While 30% were unsure  what a ‘no deal’ Brexit would do to the demand for finance, only 21% are not anticipating a rise in the demand for finance. 

Todd Davison, Director at Purbeck said: “The fact that we saw our highest peak in Personal Guarantee Insurance cover in October, when the UK was expected to leave the EU, would suggest not only the increasing demand for finance due to the uncertainties caused by Brexit, but that business owners are very conscious of the personal risks they are taking to secure new finance for their business.  With lenders demanding more security from business owners in return for finance, it’s vital they take a pragmatic approach and put protection in place so that if things do go wrong, their personal assets will be protected.”

  • Purbeck Insurance is a specialist Personal Guarantee Insurance underwriter, authorised and regulated by the Financial Conduct Authority. We work alongside lenders and brokers to provide a bespoke insurance solution based on the lender’s individual requirements and risk profile. Please contact one of our specialists today to learn more on 0208 004 7250.

[i] Survey based on feedback from 60 Commercial Finance Brokers across the UK, conducted Q3 2019


Topics: #pgi, #personalguarantee, #personalguaranteeinsurance, #commercial guarantee, #commercial finance, #bankruptcy

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