Personal Guarantees: Risk or Reward in SME Lending

When Small Businesses Get Personal Guarantees, Do You Know the Score?

Recent stats show that 60 % of SME owners feel like they’re standing on a tightrope with personal guarantees—no safety net in sight. That’s why Purbeck Personal Guarantee Insurance, the only UK company offering insurance for personal guarantees, dropped a new white paper titled Bitter Pill or Acceptable Risk? The Role of Personal Guarantees in the SME Lending Space.

Why the Buzz?

“Bitter Pill” or a gateway to opportunity? The paper dives into what personal guarantees really mean for small businesses.
It’s already on the FCA’s radar, helping shape the future of SME lending policy.
Lenders are tightening the net: directors are asked for personal guarantees at every turn—whether you’re just keeping the lights on or planning a big expansion.

Numbers That Speak Volumes

Q1 2024 saw a 49 % surge in owners looking for Personal Guarantee Insurance (PGI) to cushion a loan. Most of these were for lines of credit simply to keep the operations humming.

Don’t Let the “Guarantee Ghost” Haunt Your Dreams

Purbeck’s white paper isn’t just a list of pros and cons—it’s a cheat-sheet for real owners. Think of it as a guide to turning what feels like a risk into a strategic growth tool.

Risk‑Mitigation Playbook

Split the guarantee with a co‑director—share the load.
Only back a portion of the loan—leverage partial coverage.
Grab a personal guarantee insurance—shield yourself from the worst.

“We’re not here to scare you. It’s about owning the risk and then owning the success that follows,” says Todd Davison, Managing Director @ Purbeck Personal Guarantee Insurance. “When the FCA takes its next steps, you’ll be ready, not rattled.”

What We’re Gonna Do Next

In the meantime, we’re pushing forward. The white paper will help the FCA steer fair lending practices and empower you to see personal guarantees as a launchpad, not a bad pill.