Personal Guarantee Insurance Information for Lenders

PGI Information for Lenders

Is signing a personal guarantee a common barrier to conversion when selling your products to customers?

Personal Guarantee Insurance removes this barrier, and is available to lenders like yourself to help give you and your clients flexibility and security when it comes to personal guarantees. There are a wide variety of benefits to lenders of offering personal guarantee insurance:

Benefits:

Provide your clients with an innovative solution when signing a personal guarantee; a solution your clients may not know exists

Provides a "tool" to help convert your finance deals when your client is reluctant to sign a personal guarantee

Commissions available

Have access to your own dedicated account manager

Flexibility to work with you directly, or work with your client and keep you informed

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How does PGI benefit lenders and what advantages does it offer clients?

Personal Guarantee Insurance (PGI) provides significant benefits to both lenders and clients.

For clients, PGI acts as a financial safety net protecting personal assets, such as property and savings, by covering a portion of their liability if the business defaults. This allows them to focus on growing their businesses without worrying about significant personal financial repercussions.

In partnerships, PGI can also protect each individual partner by covering their share of the guarantee and peace of mind for everyone involved.

Can lenders earn commissions from PGI?

Yes, lenders can earn commissions by introducing clients to PGI. Facilitating access to this finance solution allows lenders to enhance their client offering and benefit financially from each successful referral.

Does PGI reduce risk for lenders?

PGI protects the borrower rather than the lender, so it does not affect the lender's security position. However, by making borrowers more comfortable with signing a personal guarantee, it contributes to a smoother lending process and demonstrates that the lender has the borrower's broader interests in mind.

How does PGI support borrower confidence?

Many directors are reluctant to sign personal guarantees because of the risk to their personal assets. Knowing that up to 80% of that liability can be insured often provides the reassurance needed to commit. This helps lenders complete more deals and build stronger client relationships.

Can PGI improve deal completion rates?

It can. For borrowers who are hesitant about a personal guarantee requirement, the availability of PGI can be the deciding factor that allows a deal to proceed. Signposting PGI at the point of offer is a simple way for lenders to help remove that barrier to completion.

What types of lending benefit from PGI?

PGI is available alongside most business lending that carries a personal guarantee, including commercial mortgages, asset finance, invoice finance, unsecured business loans, overdrafts, credit cards, peer-to-peer loans, and buy-to-let mortgages.

How is PGI introduced into the lending process?

The natural point is when the personal guarantee requirement is communicated to the borrower, for example, in a facilities letter. Lenders can refer clients to Purbeck directly, or simply signpost PGI and let the borrower make contact. We handle everything from there.

Does PGI affect loan terms or approval decisions?

No. PGI is a standalone product taken out by the borrower and has no bearing on the lender's assessment, underwriting, or loan terms. The personal guarantee itself remains fully in place; PGI simply allows the borrower to manage their personal exposure to it.

Lenders