Breaking News

Personal Guarantee risk for over 420,000 small business owners

Having assisted personal guarantors of business debt for some 12 years we were involved with assisting guarantors during the post-2008 financial crisis meltdown.

During that time we were able to agree an average discounted settlement of some 75% from the amount claimed. This was in addition to some £12m to £20m of alleged debt that our clients did not have to pay at all without any effect on their personal credit ratings because of the alleged personal guarantee debt.

Times are different now with most (but not all) personal guarantee documentation being a lot tighter but the fall-out from the COVID-19 is likely to be huge as set out below.

During this time of lockdown we are continuing to support guarantors in addition to preparing ourselves to assist with what is likely to be a similar level of claims being pursued by creditors following this current crisis.

Below is a press release by Personal Guarantee insurance provider Purbeck Insurance Services:

“It is estimated that over 420,000 small business owners in the UK are acting as personal guarantors for business loans and could be facing the risk of losing their home due to the impact of COVID-19. The estimate from Purbeck Insurance Services, is regarded as conservative and could be closer to 560,000. Purbeck is calling on the Government to consider a further measure to ease the pressure on small businesses by asking lenders to agree to a three-month moratorium on existing loans. 1.4 million UK small businesses have external funding in place according to the BDRC Finance Monitor. Of these businesses, Purbeck estimates 30% – 40% will be backed by a Personal Guarantees by the business owner/s or directors.”

Share this on Facebook
Share this on Twitter
Email to a Contact
Share this on LinkedIn

Read More News Stories