Following reports that many financial institutions have cut access to the state-backed loans, even though the scheme has been extended until the end of next November, our insurance partner has seen applications for Personal Guarantee Insurance for new business loans, double in the space of three weeks in September. This sudden increase in demand is a clear indication that small businesses are increasingly looking outside of the government loan schemes for funding.
“Those small businesses who give up securing a government loan and start looking for funding independently could also see tighter restrictions and demands for personal guarantees in return for access to much needed cash. It’s vital small businesses take measures to protect themselves from the risks of providing Personal Guarantees or we could see thousands of business owners losing their homes as well as their businesses.”
Personal Guarantee Insurance is a relatively new type of insurance that offers protection against the risk of a Personal Guarantee being called by a lender and will offset any outstanding obligations called in under a Personal Guarantee following business failure. The level of cover is based on a fixed percentage of the Personal Guarantee the company director wishes to insure and this is dependent on whether the corresponding finance facility is secured or unsecured. In essence, if the business does fail, up to 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.
We can offer Personal Guarantee Insurance both for new and existing finance agreements.
Contact us for further information and a quotation.