Borrowing can help a small business expand, refinance or cover its day-to-day costs. But when a lender asks a director to sign a personal guarantee, the decision reaches beyond the company’s finances. New figures from Purbeck Personal Guarantee Insurance suggest more owners are taking that step, and for larger sums.
Applications at record levels
Applications for personal guarantee insurance rose 62% year on year in the third quarter of 2026 and were 9% higher than in the previous quarter. September was Purbeck’s busiest month on record, with applications up 69% on September 2025. By the end of September, applications for 2026 had already exceeded the total for the whole of 2025 by 22%, according to the company’s quarterly announcement.
Loan sizes are growing too
The amounts at stake are growing alongside demand. The average loan backed by a personal guarantee rose 33% year on year to £346,105, while the average insurance cover requested increased 27% to £194,274. Applications seeking more than £450,000 of cover made up 13% of the third-quarter total, compared with 5% a year earlier. Purbeck says the total value of lending backed by personal guarantees in its data more than doubled over the year.
Why owners are borrowing
Working capital remained the most common purpose, accounting for 38% of applications. Applications linked to working-capital loans rose 68% year on year. At the same time, those linked to development finance increased 114%, refinancing rose 109% and borrowing for growth initiatives climbed 98%.
Sector and gender breakdown
The pressures vary by sector. Applications from construction businesses rose 113%, and 46% of that sector’s applications concerned working capital. Among manufacturers applying for cover, 51% were borrowing for working capital, up from 39% a year earlier. These are figures from Purbeck’s applicants, rather than a measure of borrowing across all UK businesses.
There was also a shift in who applied. Applications from women rose 86% year on year, compared with a 60% increase among men. Women accounted for 12.8% of applicants, up from 11.2% in the same quarter of 2025.
“More business owners are borrowing, and they are borrowing more,” says Todd Davison, Purbeck’s managing director. “That is a lot of family homes and savings standing behind business plans.”
What directors should consider before signing
A personal guarantee can expose a director’s own assets if the business cannot repay its borrowing. Before signing, directors should understand the amount covered, whether they could be liable for the full debt alongside other guarantors, and how the guarantee can be released. The government’s guidance on personal guarantees provides further detail.
Growth plans and immediate cash needs both feature in Purbeck’s figures. For owners considering a guaranteed loan, the practical question is the same in either case: what would they personally owe if the business could no longer pay?
