Purbeck welcomes crackdown on late payments as directors face rising personal risk
Purbeck Insurance Services has welcomed the government’s Small Business Protections Bill as an important step towards tackling the damaging impact of late payments on the UK’s small business community. Purbeck is the UK’s only provider of personal guarantee insurance to small and medium sized business owners and directors.
Todd Davison, managing director of Purbeck Insurance Services, said: “Late payment is one of the key reasons otherwise viable firms find themselves forced into increasingly risky borrowing simply to survive.
“Our latest data shows that 35% of SMEs seeking finance are doing so purely for working capital to keep the lights on and wages paid. At the same time, we have seen a record surge in directors seeking protection against personal guarantee risk because so many business owners are having to put their homes, savings and personal finances on the line to secure essential funding.
“Every business failure is not just an economic statistic, it is a personal tragedy for the people who have backed their businesses with their own financial security. Behind every collapse is an entrepreneur, family or business owner who has taken enormous personal risks to build something valuable.
“The government’s focus on improving payment culture is therefore hugely significant. Faster payment practices and stronger protections for smaller firms could help reduce the pressure on businesses to take on emergency borrowing or expose themselves to unsustainable levels of personal liability.
“While many SMEs are still borrowing defensively to manage cashflow pressures, we are also seeing encouraging signs of resilience and ambition, particularly in sectors such as construction and manufacturing, where businesses are continuing to invest in growth despite economic uncertainty. That entrepreneurial confidence deserves support, not a system that leaves smaller firms carrying disproportionate financial risk.”