Applications for personal guarantee backed business finance rose 63% year on year in the second quarter of 2026. The average loan value stayed above £300,000 for the second quarter running.
It is one of the more significant UK SME finance numbers of the quarter, and almost nobody in the mainstream press has touched it.
01The branch is empty. The phone is ringing.
The story usually told about small business lending is a story about refusal. Banks tightening, founders turned away, funding drying up.
That is not what this number says. Founders have not stopped borrowing. Two thirds more of them applied for this kind of finance than a year ago, and they did it by agreeing to stand personally behind the debt, which is not the behaviour of people who have given up.
They have stopped borrowing in one particular place, and started borrowing somewhere else.
02What the number actually counts
Three qualifiers matter, because you will see this reported as small business borrowing rising 63%, and that is a different claim.
- Applications, not completed lending. This is a demand signal. It does not tell you money reached anyone's account.
- Personal guarantee backed finance specifically, not all SME borrowing.
- The publisher sells personal guarantee insurance. Purbeck Insurance Services draws the data from applications it sees, which makes it a genuine window on this corner of the market rather than a measure of the whole of it.
Stated accurately it is still a striking number.
03The part that should give you pause
What the money is for, across Q2 2026 applications:
- 36.2% working capital
- 20% investment in growth
- Nearly one in four asset purchase, development or acquisition
- Average borrowing by start-up businesses of £345,000, where backed by a personal guarantee, higher than the average for established businesses
Working capital leading is the line worth sitting with. Growth borrowing is a choice you make. Working capital borrowing is usually a response to something: a slow payer, a stock cycle, a cost that moved without warning.
When more than a third of personally guaranteed borrowing is funding day to day trading, that is a cash flow signal rather than a confidence one. A lot of directors are putting personal assets behind the ordinary running of the business.
04Which is fine, as long as you know what you signed
A limited company limits liability. A personal guarantee is the document that switches part of that protection off. If the company does not repay, you do.
That is often exactly the right trade. Giving a guarantee is frequently the reason a good business gets funded at all, and directors sign them every day with their eyes open. But the document does all the work, and two guarantees that look alike can behave very differently when they are called. Whether it is capped. Whether it survives you resigning. Whether anything of yours is secured against it.
We have written the full version, including how PG-backed finance compares with Start Up Loans and the six questions worth asking before you sign: where the money is actually coming from.
Different lenders ask for different security. bizbritain compares growth finance options across 100+ lenders before you commit to a guarantee.
Figures as published by Purbeck Insurance Services at the time of writing. Nothing here is a recommendation to give a personal guarantee. Applications are subject to status, affordability and lender criteria.
