Many small businesses may be cheered tomorrow if the Chancellor announces more low interest loans for SMEs. But if houses and other assets are required, then many directors will look for an alternative way to raise finance. Let’s be honest, it’s bad enough that the Council will steal your house if you need nursing care later in life, without giving it away to the government for a 50K loan.
Here’s some thoughts from Purbeck;
In anticipation of a new Government backed loan scheme for SMEs being confirmed in tomorrow’s Budget, Purbeck Personal Guarantee Insurance, provider of the UK’s only Personal Guarantee Insurance can offer expert advice on the risks of Personal Guarantees that could form a key part of the new scheme, and how to mitigate them.
Through a Freedom of Information Request, Purbeck Personal Guarantee Insurance found that under the existing Coronavirus Business Interruption Loan Scheme, loans worth £1.22bn were revealed to have Personal Guarantee attached and the average loan backed by a Personal Guarantee was £766,000 in 2020.
Todd Davison, MD of Purbeck Personal Guarantee Insurance said: “Only around 4 in 10 small business owners understand what a Personal Guarantee is so there needs to be much greater awareness of the risks and how to mitigate them if they are set to become a core element of the new loan scheme.”