News

• Technology will continue to drive innovation in small business finance. The days of making an appointment with the bank manager is becoming a thing of the past.  Technology is making the process more streamlined, speeding lending decisions and access to finance for small businesses. In 2020, Open Banking and the ability to draw information from accounting software will give lenders and financial intermediaries a wealth of information that will enable them to provide focused credit solutions.
•  
• Peer to peer business lending will continue to grow in 2020. P2P lenders will play a valuable role in providing access to credit for small businesses – particularly those who have not been able to access high street bank funding.  This will fill the funding gaps for underserved businesses and will help underpin many new start-ups in the year ahead.
•  
• New rules concerning who gets paid in what order in an insolvency could also support growth in Peer to Peer lending. In April 2020, HMRC will become a preferred creditor in a business insolvency for certain HMRC debts[i]. These changes will encourage traditional lenders to consider their risk exposures.  This may lead to a tightening of credit and/or credit at more expensive interest rates due to the preference of HMRC over floating asset and unsecured creditor positions.
•  
• There will be a continued reliance on financial intermediaries such as accountants and finance brokers in 2020 as small businesses seek expert support to determine their best finance options. There will be a particular demand from those businesses who have not been able to secure finance from high street banks.
•  
• Collaboration between banks, alternative finance providers and policymakers will ramp up to ensure that businesses have access to critical funding lines, particularly if the UK leaves the EU without a deal.
•  

Following news that business birth rates have fallen[i], Purbeck, the provider of the UK’s only personal guarantee insurance solution for the owners and directors of UK SMEs, is urging small businesses to build their financial resilience for 2020 to help maximise opportunities to grow.  In a survey by Purbeck, 70%[ii] of small business owners said Brexit uncertainty had made their business harder over the past year and the burden of managing cashflow is one of top five hardest things about running a business. 

At the same time, lenders are demanding more security from business owners and directors for new finance deals – in a recent survey of finance brokers by Purbeck, 49%[iii] reported an increase in demand for personal guarantees in the past year.

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.

A survey of commercial finance brokers[i] undertaken by Purbeck, the UK’s only personal guarantee insurance solution for the owners and directors of UK SMEs, has uncovered an increasing demand by lenders for personal guarantees to secure business  finance.  

In the survey, 47% of brokers 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.

Now more than any time since the last recession, small businesses need the confidence to borrow

Purbeck Insurance Services, provider of the UK’s only Personal Guarantee Insurance solution for the owners and directors of small businesses has welcomed the suggestion made by Andrew Bailey, CEO, Financial Conduct Authority in a recent report, to bring regulation into small business lending.

Finance warning to UK’s small business owners as Brexit uncertainty continues

• - 70% of small business owners say Brexit uncertainty has made business harder
• - Long hours and pressure on family life some of the hardest aspects of running your own business
• - Small business owners cautioned on taking loans that will put personal finances at risk – 43% arrange funding without seeking independent advice

It’s a buzz running a small business, but as a Director of a growing business, I have a fairly good idea of what can keep other small business owners awake at night.  Cashflow.

Whether it’s getting money in, paying it out or finding new sources of investment, managing finances can be a headache.  So when business owners are faced with the challenge of finding extra cash quickly, where do they go?

As Britain’s top banks reaffirm their commitment to back British business through access to finance, ahead of Brexit[i], Purbeck Insurance Services is urging small business owners not to be deterred by a Personal Guarantee to secure access to funding but to look at ways they can mitigate the risk. In a survey by Purbeck[ii], over 1 in 10 small business owners (12%) said they’d decided against taking out a business loan because it included a Personal Guarantee.  

Purbeck Insurance Services is the UK’s only insurance provider to offer Personal Guarantee Insurance.

Demand for Personal Guarantee Insurance from small businesses who have secured finance from Peer to Peer lenders such as Funding Circle rose 40% in the first six months of 2019 compared to H2 2018.    Analysis by Purbeck Insurance Services, the UK’s only insurance provider to offer Personal Guarantee insurance also found that the number of small businesses seeking personal guarantee insurance for unsecured loans has risen 58% in the same period. 

In the first six months of 2019, the number of small business owners and directors who purchased Personal Guarantee Insurance for a Personal Guarantee backed finance deal rose 23%, compared to the previous six months.  Most small business owners buy protection for loans of £25,001-£50,000 and the demand for insurance protection for this bracket has grown 38% in H1 2019.  However, the number of policies for loans of £50,000-£75,000 has risen by 138% over the same half year period.