July 2024: More small businesses applied for finance to support growth initiatives in quarter 2 2024 than at any other time in the past three years according to the latest analysis by Purbeck Insurance Services – the UK’s only provider of personal guarantee insurance for small business loans.
19% of small business owners securing personal guarantee backed loans in Q2 were doing so for investment in growth initiatives while loans secured for working capital fell to 31%. While this is still the main reason for securing finance and applying for Personal Guarantee Insurance, this is the lowest level since Q3 2022, falling back after a spike (37%) in Q1 2024.
Key Findings:
Todd Davison, MD of Purbeck Insurance Services says: “The General Election was announced at the end of May and within days we saw a marked uplift in applications for Personal Guarantee Insurance for personal guarantee backed small business loans. This, and the notable rise in loans for growth initiatives does suggest a turnaround in confidence in the small business community, after a tough few years.
“The new Government will now need to deliver on its promises and help ensure that any barriers to finance for small businesses are broken down. This should include making small business owners aware that they may need to sign a personal guarantee for a business loan. Being open to this idea will improve their options and they can mitigate the risk, with personal guarantee insurance being one solution.”
Personal guarantee insurance protects business owners by covering their personal assets if their business defaults on a loan. It mitigates the risk associated with personal guarantees required by lenders.
A small business loan is a financial product designed to provide funding to small businesses for various purposes, including growth, working capital, and equipment purchases.
Working capital refers to the funds available to a business for its day-to-day operations. It is calculated as current assets minus current liabilities.
Growth initiatives are strategic actions taken by a business to expand its operations, increase revenue, or improve market position. This can include new product development, market expansion, or investment in technology.
Explore more articles in the Business category
