Surge in personal guarantee loans among new businesses

Purbeck Insurance Services has reported a significant rise in the number and value of personal guarantee backed loans secured by young businesses.

In Q2 2025, 16% of small business loans supported through Purbeck’s Personal Guarantee Insurance (PGI) were for businesses under two years old. This marks a sharp increase from 9% in Q1 2025 and just 6% in Q2 2024, indicating a notable upward trend in lending to early-stage firms.

The average loan size for these young businesses has also seen a dramatic rise. In Q2 2025, the average loan reached £165,538, up from £108,403 in Q2 2024 – a 52.71% increase year-on-year.

Purbeck’s analysis points to an uptick in confidence amongst entrepreneurs to start new businesses and take financial risks and insurance protection to grow them.  At the same time the data suggests lenders are proving willing to support these businesses with personal guarantee backed funding.

The findings come as the UK Government announces a series of measures to boost entrepreneurial support in the UK.  This includes a mandatory Code of Conduct for accredited lenders that use the British Business Bank’s Growth Guarantee Scheme (GGS) to ensure the use of PGs under the Scheme is fair and transparent and a commitment to help businesses better understand the role of personal guarantees.

Todd Davison, Managing Director of Purbeck Insurance Services, said “We’re seeing a clear shift in the lending landscape for start-ups. More start-ups are raising finance, and they’re doing so with confidence using personal guarantee insurance to mitigate the risk of PG backed loans. The fact that loan values are rising suggests entrepreneurs are both ambitious and attractive to lenders. This is encouraging and points to optimism and resilience in the UK start-up scene.”