Purbeck Personal Guarantee – the U.K.’s first and only provider of Personal Guarantee Insurance (PGI) – has noted a substantial increase in smaller businesses reaching out. The type of support they seek is varied, but it includes mentoring and advice services. Recently, the number of calls seeking advice went beyond the level of calls received during the peak of the Covid-19 hospitalisations.
Purbeck reported a 67% increase in businesses still making use of its support and mentoring services during the 1st January 2022 to end of August 2022 time period. This is compared to the same period last year, despite that time period covering the third national lockdown and high Covid-19 infection and hospitalisation. The trend is carrying on, with September noting a dramatic 80% increase in calls compared to the same period last year.
Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “Purbeck is used to supporting businesses in financial distress – this is part and parcel of the insurance we offer – but clearly many firms have been deeply concerned about making ends meet in the face of rising costs. While news of a slight easing of Consumer Price Inflation in August was welcome, economists warn it is likely to rise again later in 2022. Cancellation of the planned rise in corporation tax and a reversal of the 1.25 percentage point rise in National Insurance contributions may help many small businesses in the coming months and we welcome news of the widening of eligibility for the Start-up Loan Scheme[ii].
“At Purbeck, we have helped many entrepreneurs behind start-up businesses secure personal guarantee backed loans, knowing that if their venture fails, their personal assets will be protected. In fact, around 1 in 5 applications for Personal Guarantee Insurance were from start-ups in Q2 2022.”
Personal Guarantee Insurance mitigates the risk of signing a personal guarantee backed business loan. This means if the business does fail, 80% of the loan will be settled by the insurance rather than the business owner’s home, savings and other personal assets being called on to settle the debt.
The level of cover is based on a fixed percentage of the personal guarantee the company director wishes to insure. This is dependent on whether the corresponding finance facility is secured or unsecured.
Personal Guarantee Insurance also does a lot more than pay out following a claim. Policy holders are offered access to free mentoring and support services if the business gets into financial distress, plus the huge benefit of expert guidance at the point the debt needs to be settled.
