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Small business owners facing failure also face increased risk of losing their home.

The value of personal guarantee backed business loans to SMEs during the pandemic has risen on average by 45% according to analysis by Purbeck Insurance Services, provider of the UK’s only Personal Guarantee Insurance.

• A new survey of commercial finance brokers[i] supporting the UK’s small businesses suggests thousands of firms will be clamouring for business loans as the government support measures ease back:
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• -> 88% of SME finance brokers anticipate rise in demand for loans as support measures ease
• -> 87% expect rise in business owners having to sign Personal Guarantees to get access to cash

A rise in start-ups born during the pandemic^[i] is hugely positive but also not surprising. We’ve had more time to think and do and explore new avenues, particularly where existing business models or employment have ceased to exist. Necessity truly is the mother of invention. But while the pandemic has created new opportunities, the lending environment for start-ups looks set to be challenging.

‘Keep your hands off my home’ - Start-ups get cash injection of £25 million without risk of personal guarantee

For smaller businesses across the UK, the government has introduced a favourable lending package to help firms get access to the funds they need to survive the coronavirus crisis. The Coronavirus Business Interruption Loan Scheme (CBILS) is available via British Business Bank-accredited lenders including high-street banks and smaller specialist lenders until 30 September 2020.

Personal cost of Pandemic to business owners is high but optimism for the future prevails

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

Purbeck Insurance Services, provider of the UK’s only Personal Guarantee Insurance solution is warning the owners and directors of specialist and small-scale manufacturing businesses that they may find their finance options severely limited unless they put their personal assets such as their home and savings, on the line. 

Purbeck responds to the R3^[i] survey of insolvency and restructuring experts that found 8 in 10 respondents expect personal insolvency numbers to increase within the next 12 months with 74.2% expecting this to be related to business failure as a result of Personal Guarantees.