Purbeck Insurance calls on UK government for SME stability in Budget

UK-based personal guaranteed insurance provider Purbeck Insurance Services has called on the government to use the Budget to be held on 26 November to provide small and medium-sized (SME) businesses with stability.

The call comes amid new data revealing that firms are pulling back on investment, borrowing more for maintaining cashflow, and facing personal financial risk.

Last month was a record month for applications for personal guarantee insurance, highlighting increased exposure for business owners.

According to Purbeck Insurance Services' latest analysis, 38% of SME loans that were taken that month were solely for working capital and intended to sustain cashflow.

This marks the highest proportion recorded by the business since the beginning of 2025.

Data from the Barclays Business Prosperity Index indicates that 55% of SMEs have paused plans to make investment in response to economic uncertainty, a 7% increase over last year.

Simultaneously, insolvencies are on the rise, with the Insolvency Service reporting a year-on-year (YoY) jump of 16.7% in business failures and more than 2,000 firms entering liquidation during October alone.

Further Purbeck Insurance analysis shows the extent to which UK-based SMEs are financially 'stretched'.

For the third quarter (Q3) of 2025, lending data revealed that the average SME loan value climbed 42% YoY to £289,827 ($379,377). For young businesses, defined as those operating for two years or less, loans reached a record £155,257 - up 64% from the previous year.

Purbeck Insurance Services is requesting the UK's chancellor to introduce long-term policy stability, enabling businesses to better plan investments.

The company also advocates for support to include established SMEs.

It urged to include measures to ease cashflow pressures, lessen dependence on high-risk borrowing, and implement policies that build confidence.

Purbeck Insurance Services managing director Todd Davison said: “Small businesses are remarkably resilient, but they’re facing a perfect storm - rising costs, political uncertainty, and increasing pressure to take on more personal risk to secure finance. The Budget must give them breathing space.”

"Purbeck Insurance calls on UK government for SME stability in Budget " was originally created and published by Leasing Life, a GlobalData owned brand.

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