Personal guarantee insurance applications rise 62% as business owners put more of their own money on the line
Applications by U.K. business owners for personal guarantee insurance (PGI) rose 62% year on year in the third quarter of 2026, according to new data from Purbeck Personal Guarantee Insurance. Applications were also 9% higher than in Q2, making Q3 2026 the second-busiest quarter Purbeck has recorded since 2021, behind only Q1 2026. The data is a measure of how much personal risk small business owners are taking on to fund their businesses.
Each application represents a U.K. business owner who has been asked to back a business loan with a personal guarantee. If the business cannot repay because it has become insolvent, the lender can pursue the owner’s home, savings and other personal assets. Being a Limited company offers no protection against a guarantee the owner has signed.
September 2026 record month
Purbeck’s data shows that September was the busiest month on record, with applications up 69% on September 2025. With a quarter of the year still to go, applications received in 2026 are already 22% higher than the total for the whole of 2025.
Loan values rise 33%
The sums involved are rising too. The average loan backed by a personal guarantee rose 33% year on year to £346,105 and the average level of PGI cover requested rose 27% to £194,274. Notably, there was a marked increase in the highest band of cover – over £450,000. This rose from 5% in Q3 2025 to 13% in Q3 2026.
38% of PGI applications for working capital
Loans to provide working-capital rose 68% year on year and remained the most common reason for borrowing, accounting for 38% of PGI applications, up from 36% a year earlier.
Among the main reasons for borrowing, investment and expansion grew fastest. Applications linked to development finance rose 114% and refinancing rose 109%, while applications for investment in growth initiatives almost doubled (up 98%) and now account for 18.5% of the total.
By contrast, borrowing for stock and asset purchases grew by less than 10% year on year and fell sharply from Q2, down 38% and 25% respectively.
Demand for PGI from Construction businesses doubles
Construction businesses accounted for 18.1% of all applications, up from 13.8% a year earlier, as applications from the sector rose 113%. The average level of cover requested by construction firms rose 31% to £232,993. Almost half (46%) of construction applications were for working capital.
Manufacturing applications rose 43% year on year but were 7% down on Q2. More than half (51%) of manufacturers applying were borrowing for working capital, up from 39% a year earlier.
PGI applications from women rose 86% year on year, outpacing the 60% rise among men. Women accounted for 12.8% of applicants, up from 11.2% a year earlier.
Businesses trading for over two years made up 85% of applications, up 70% year on year. Applications from businesses trading for less than two years rose 45%, but the average loan they sought rose 55%.
Todd Davison, managing director, Purbeck Personal Guarantee Insurance, said: “More business owners are borrowing, and they are borrowing more. The total value of lending backed by the personal guarantees in our data has more than doubled in a year. That is a lot of family homes and savings standing behind business plans.
“The positive news is that applications for development finance have more than doubled, borrowing to invest in growth has almost doubled and we’re seeing more female business owners seeking out PGI to protect business loans. But working capital is still the biggest single reason for borrowing, and in sectors such as construction and manufacturing it accounts for around half of applications.
“A personal guarantee is hard to avoid in business lending. Before signing, directors should understand exactly what they could be liable for, take independent advice, and think about how they would protect themselves and their family if the business ran into trouble. Personal Guarantee Insurance provides protection for up to 80% of the loan, and as our data shows, more and more business owners are seeking out this cover to borrow with greater confidence.”