Finance proving resilient for Small and Medium Enterprises according to Purbeck's assessment
Growing Confidence in UK SMEs: Purbeck Insurance Services Reports Increase in SME Lending and Growth Initiatives
According to the latest analysis by Purbeck Insurance Services, there is a strong upward trend in SME lending and growth initiatives. This trend is reflected by an increase in business loan applications, indicating that more SMEs are seeking financing to support business growth and operational needs.
In June 2025, the number of Personal Guarantee Insurance (PGI) applications reached a record high, up 17.8% compared to June 2024. This growth in PGI applications continued into Q2 2025, with a 3.2% year-on-year increase.
This trend is not limited to PGI applications alone. Commercial credit demand has also seen a notable growth, with overall commercial credit rising by 5.2% and business loan applications growing by 6.0% compared to the same quarter the previous year. This growth is fueled by moderate inflation and lower interest rates, encouraging SMEs to seek credit.
The increase in loan applications is also supported by improved willingness of banks to lend, including to SMEs. Although overall loan demand remains cautiously optimistic, the perception of economic outlook remains a key factor influencing financing availability.
Purbeck Insurance Services has launched several initiatives to support this growing trend. The Purbeck Personal Guarantee Insurance Portal, designed for SMEs, streamlines the process of applying for and managing PGI. This portal allows brokers to gain a real-time view of PGI applications, policies, and other related information. Additionally, Purbeck has launched a dedicated Broker Portal for Commercial Finance and Insurance Brokers.
The growth in SME lending is particularly significant given the current context of the Treasury Committee's Inquiry into SME finance. The inquiry is looking at the current system of directors having to guarantee assets to obtain business finance, and Purbeck's Managing Director, Todd Davison, has commented on the need for reforms to better support SMEs.
In line with this, the average personal guarantee demand from lenders for SME owners and directors was £194,499 in Q2 2025, a 6.4% rise from Q1 2025. However, the number of SMEs needing finance to keep their business on an even keel has not been this low since Q3 2024.
The growth in SME lending is also reflected in the types of loans being sought. SMEs are spending more on assets, with a 9.7% increase in applications for personal guarantee backed finance to buy an asset. Refinancing deals grew dramatically year on year by 53.6% in Q2 2025. Meanwhile, the number of small and medium-sized businesses needing personal guarantee backed finance for working capital decreased by 24% compared to the previous quarter.
In conclusion, the latest analysis by Purbeck Insurance Services suggests a growing level of confidence in UK SMEs. With increased SME lending activity in Q2 2025, driven by greater loan application volumes supported by personal guarantee insurance use, the future looks promising for SME growth and development in the UK.
[1] Source: Bank of England's Agents' Summary of Business Conditions, July 2025.
- As the demand for Personal Guarantee Insurance (PGI) and commercial credit continues to grow among UK SMEs, it is clear that more businesses are seeking finance to fuel their growth and operational needs, underpinned by moderate inflation and lower interest rates.
- The increasing trend in business loan applications and the launch of initiatives like the Purbeck Personal Guarantee Insurance Portal and Broker Portal for Commercial Finance and Insurance Brokers are indicative of a growing business environment, which is subject to the Treasury Committee's Inquiry into SME finance and the need for reforms to better support SMEs.
