Turnaround in Confidence Amongst Small Businesses as 1 in 5 Secures Funding for Growth, Q2 2024

Published On : 07/17/2024

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:

• Appetite for finance for growth on the up – 19% of applications were for investment in growth initiatives – the highest level recorded since Purbeck started collecting this data in Q1 2021
• General Election effect makes June the second highest month on record for applications for personal guarantee insurance from small business owners/directors
• Big year on year rise in demand for small business finance – there has been a 69% increase in applications for Personal Guarantee Insurance for a Small Business Loan Q2 2024 vs Q2 2023
• The average cover for a personal guarantee reaches £195,051 – a 33% rise compared to the same quarter in 2023.
• In construction, the average cover for a personal guarantee rose to £230,910. This is the highest level recorded to date.
• 40% of applications for personal guarantee insurance were for unsecured loans while 16% have been for secured loans.
• Just 8% of loans are Asset Finance and the number invoice finance loans have fallen to just 5% of applications – the lowest level recorded to date.

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.”

Please click this link to download the press release.

Jessica Weisman-Pitts

Jesse Pitts has been with the Global Banking & Finance Review since 2016, serving in various capacities, including Graphic Designer, Content Publisher, and Editorial Assistant. As the sole graphic designer for the company, Jesse plays a crucial role in shaping the visual identity of Global Banking & Finance Review. Additionally, Jesse manages the publishing of content across multiple platforms, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune.