Manufacturers shore up finances ahead of Budget

Purbeck Personal Guarantee Insurance saw a 161% year on year increase in applications for personal guarantee backed business loans by the directors and owners of manufacturing businesses.  Personal guarantee backed loans require the business owner to put their personal assets (such as their home and savings) on the line as security for the loan.

Half of manufacturing firms need finance for working capital

While an increase in loan applications suggest higher levels of confidence, Purbeck’s data shows that  48% of applications for personal guarantee backed loans in Q3 2024 were for working capital, to keep the business running.  This is up from 34% in Q2 2024.

15% of loan applications were for business acquisitions and a further 15% were for asset purchase.

Marginal increase in the average size of loan

Manufacturing firms are also being prudent about the amount they are borrowing.  The data from Purbeck Personal Guarantee Insurance shows the average size of loan and corresponding personal guarantee demand was £167,865 - a marginal increase on the same quarter in 2023 (£166,030).

"Our analysis echos the cautious optimism expressed in the Manufacturing Outlook for Q3 2024, from Make UK. We would hope that once manufacturers feel more confident about the outcome of the Budget and the impact of rising energy costs, they will have renewed confidence to invest and grow," said Todd Davison, MD of Purbeck Insurance Services.

www.purbeckinsurance.co.uk