161% surge in personal guarantee loans shows boosted confidence in manufacturing

Purbeck Personal Guarantee Insurance saw a 161 percent year-on-year increase in applications for personal guarantee-backed business loans by the directors and owners of manufacturing businesses. 

Personal guarantee-backed loans require the business owner to put their personal assets (such as their home and savings)
on the line as security for the loan.

Half of manufacturing firms need finance for working capital
While an increase in loan applications suggests higher levels of confidence, Purbeck’s data shows that 48 percent of applications for personal guarantee-backed loans in Q3 2024 were
for working capital, to keep the business running. This is up from 34 percent in Q2 2024.

15 percent of loan applications were for business acquisitions and a further 15 percent were for asset purchases.

Marginal increase in the average size of the loan
Manufacturing
firms are also prudent about the amount they borrow. The data from Purbeck Personal Guarantee Insurance shows the average size of the loan and corresponding personal guarantee demand was £167,865 – a marginal increase from the same quarter in 2023 (£166,030).

Todd Davison, MD
of Purbeck Insurance Services, said: “Our analysis echoes the cautious optimism expressed in the Manufacturing Outlook for Q3 2024, from Make UK. 

“We would hope that once manufacturers feel more confident about the outcome of the Budget and the impact of rising energy costs, they will have renewed confidence to invest and grow.”