More construction firms are signing personal guarantees
In my last article for FIBA Advantage Online, I wrote about how construction firms and property developers, often without a physical asset to offer as security, are increasingly turning to finance backed by a personal guarantee. Our latest data shows that trend has accelerated.
Applications for personal guarantee insurance from construction businesses more than doubled in the third quarter of 2026. Construction now accounts for 18 per cent of all personal guarantee insurance( PGI) applications Purbeck receives, up from 14 per cent a year ago. In September alone, more than one in five PGI applications came from the sector.
Larger sums at stake
The amounts involved are growing too. The average level of cover requested by construction firms rose 31 per cent year on year and is now above the average across all sectors. More than half( 52 per cent) of construction applications were linked to unsecured loans. Without bricks and mortar to offer the lender, the director ' s personal assets effectively become the security.
Cash flow still dominates, but growth is returning
Working capital remains the biggest single reason construction firms borrow, accounting for 46 per cent of applications. But the mix is shifting. In Q3 2026, borrowing to invest in growth rose 167 per cent and now makes up 15.5 per cent of the sector ' s applications. Development finance accounted for almost 9 per cent, up from less than 2 per cent a year ago, while refinancing more than doubled.
What this means for brokers
For FIBA brokers, this is both an opportunity and a responsibility. Our data suggests that construction clients are coming back to the market with bigger plans and bigger borrowing requirements. Lenders are willing to back them, but often this is only on the strength of a personal guarantee.
Brokers are well placed to make sure those clients understand what they are signing: whether a guarantee is capped or unlimited, whether it covers a single facility or all monies owed, and how long it will stay in place. Personal guarantee insurance can then provide a safety net, protecting a director ' s home and savings if a guarantee is called, without blocking access to the finance the business needs to grow.
ABOUT PERSONAL GUARANTEE INSURANCE
Personal Guarantee Insurance provides directors with financial protection if a lender enforces a personal guarantee, helping to cover the guaranteed amount and reduce the impact on personal assets, while supporting continued access to vital business finance. Available for personal guarantee commitments between £ 5,000- £ 750,000, Purbeck Insurance Services has helped over 5000 business owners and directors secure finance in the knowledge that their personal assets are protected.
Find out more
For further information, visit the website www. purbeckinsurance. co. uk or to contact the team call 0208 004 7250 or email info @ purbeckinsurance. co. uk
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