British business owners bet their homes on growth at a record rate
When a small business owner signs a personal guarantee to secure a loan, they’re putting their home, their savings, and their financial future on the line. According to new data, a record number of UK directors did exactly that in the first three months of 2026.
New figures on small business lending reveal a 65% surge in applications for Personal Guarantee Insurance in Q1 2026. The data from Purbeck Insurance Services, the only provider of personal guarantee insurance (PGI) shows the scale of risk that comes with running a small business as more directors sought cover in the first quarter on 2026 than at any time previously, each having committed their own personal assets as collateral for business borrowing.
The average value of those guarantees has risen 14% to £210,350 in Q1 2026 and the average loan value has risen to £330,200, up 22.4% on the previous quarter.
Working capital needed to keep the lights on and the wages paid accounted for 35% of borrowing. But in a notable shift, growth-focused borrowing hit a record 20% of applications, the highest level ever recorded.
Unsecured lending, where there is no business asset to fall back on at all, accounted for 49% of all applications, making the personal guarantee the sole form of security the lender holds.
Construction applications jumped 87% quarter-on-quarter, as firms looked to fund contract delivery and project pipelines. Manufacturing saw an even sharper rebound: applications surged 136% after a sluggish end to 2025, suggesting that producers are now actively gearing up for a more active year. Both sectors are among the heaviest users of personal guarantee-backed finance.
Contrary to what the scale of personal exposure might suggest, the borrowing is being led by established, experienced businesses. 89% of applicants had been trading for more than two years, and these firms accounted for the bulk of total loan value. This suggest most loans are being secured by seasoned business owners who know their market, see an opportunity, and are willing to back themselves to take it.
Todd Davison, managing director of Purbeck Insurance Services, said: “Personal guarantees are one of the least-discussed features of small business finance, yet they sit behind a vast proportion of the lending that keeps UK SMEs moving. When a bank or lender cannot rely purely on a business’s assets or credit history, it asks the director to back the loan personally. If the business fails and the debt can’t be repaid, that liability falls directly on the individual.
The Q1 data suggests this dynamic is intensifying. Every one of these applications represents a director who has personally put their hand up and said: I back my business enough to put my own money on the line.
The surge in construction and manufacturing is particularly significant. These are sectors that build things, make things, employ people at scale. Their renewed appetite for growth finance is a signal the wider economy should notice.
Business owners aren’t just surviving; they’re backing themselves to grow, even when it means putting their own financial security at stake.”