UK firm Purbeck’s personal guarantee insurance has seen a sharp rise in small businesses contacting its mentoring and advice service for support.
From January to the end of August 2022, Purbeck saw a 67 percent increase compared to the same period in 2021. In September, calls to the service were 80 percent up on 2021.
And a worrying 21.6 percent of US small businesses continue to feel negative effects from the pandemic. Findings by financial information website Safe Trade Binary Options gives some cause for optimism, with its experts explaining how the Bank of America Small Business Funding programme is a useful source of relief for those impacted.
Announced last month, the programme will deliver financial support to SMEs which the US government deems to have “a low level of access to capital funding”. The initial roll out will see businesses in Atlanta, Chicago, Charlotte, Dallas, and Los Angeles eligible for funding.
Purbeck MD Todd Davison said many firms are concerned about rising costs. While news of a slight easing of Consumer Price Inflation in August was welcome, economists warn it is likely to rise again. “Cancellation of the planned rise in corporation tax and a reversal of the 1.25 percentage point rise in National Insurance contributions may help,” he said. Around one in five applications for Personal Guarantee Insurance were from start-ups in Q2 2022.
PGI mitigates the risk of signing a personal guarantee backed business loan. This means if the business does fail, 80 percent of the loan will be settled by the insurance.
The level of cover is based on a fixed percentage of the personal guarantee the company director wishes to insure. This is dependent on whether the corresponding finance facility is secured or unsecured.
PGI policyholders are offered access to free mentoring and support services if the business gets into financial distress, plus the huge benefit of expert guidance at the point the debt needs to be settled.