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Purbeck Personal Guarantee Monitor Q3 2022

  • 123% year on year increase in business loans secured with personal guarantee attached
  • Loans secured for growth at highest level since Q1 2021


October 2022: Purbeck Personal Guarantee Insurance, the U.K.’s first and only provider of personal guarantee insurance has published its Q3 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 123% year on year.  While working capital remains the prime reason for new funding with 28% of loans secured for this reason, Purbeck’s analysis shows that more small businesses are using finance to invest in growth opportunities compared to Q2 2022.  In fact, the number of loans being used to support growth opportunities has reached its highest level since Q1 2021.

Unsecured loans remain the prime funding route making up 37% of business loans in Quarter 3 2022, up from 28% recorded in Quarter 2 2022.

However, the average value of loans has fallen by around 10%, from £164,524 in Q3 2021 to £148,357 in Q3 2022. 

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.

Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “Despite concerns over access to finance for small businesses, our data shows that Q3 2022 has been another strong quarter in personal guarantee backed loans for small businesses. We have seen a steady increase in loans secured for investment in growth opportunities which is hugely positive given the immense cost challenges facing many small firms. With interest rates rising, the issue now is servicing these new loans as the cost of doing business continues to grow. 

“This really underlines the importance of personal guarantee insurance to protect the personal assets of business owners and directors who have put their savings, investments and even their home on the line as security should their business fail.  With insolvency rates exceeding pre-pandemic levels[i] it is vital small business owners take every step they can to mitigate the risks that come with securing new funding.”