Construction Firms Ramp Up Borrowing - Personal Guarantee Insurance Applications Surge 87% in Q1 2026

Average value of Personal Guarantee reaches record high

The latest data from Purbeck Insurance Services on personal guarantee backed business loans reveals an 87% rise in applications for Personal Guarantee Insurance (PGI) from construction firms in the first quarter of 2026.  PGI is used to protect directors from the risks of personal guarantee backed loans. The data reveals a growing reliance on external finance to support project delivery and business expansion plus heightened awareness among directors of the risks of personal guarantees. 

Purbeck’s data also shows that the average value of a personal guarantee signed by a director in construction/building firms has risen to £217k, up 21% on the same quarter in 2025 and the highest level recorded to date.

Construction has consistently been a leading sector for PGI demand, but the latest figures show that close to one in five (approximately 17.4%) of all PGI applications in Q1 came from construction businesses.

Working Capital remains the primary driver of loan applications, with roughly 45% of applications linked to maintaining cashflow. This reflects ongoing pressures from upfront project costs, supply chain volatility, and delayed payments.

However, 18% of applications were for growth initiatives, including hiring, investing in new capabilities, or expanding service offerings.

The data suggests that more construction firms are now actively pursuing opportunities, even as they take on the additional risk of borrowing secured by personal guarantees.

For many directors, signing a personal guarantee is a significant weight with the potential exposure of personal assets such as the family home a primary concern. PGI acts as a vital safety net, providing the confidence business owners need to access essential funding.

Todd Davison, MD of Purbeck Insurance Services, said: "The start of 2026 has seen a significant rise in demand for funding across SMEs in the construction sector. While working capital remains critical to manage the traditional challenges of upfront costs, the 87% increase in PGI applications suggests a clear shift in mindset — directors are no longer prepared to put their personal assets at risk in pursuit of growth.

“That need for protection is becoming even critical as the value of personal guarantees rises by 21% year-on-year.

“Looking ahead, 2026 is likely to remain a balancing act for these firms. Opportunities are clearly there, but so are the pressures — from cashflow constraints to ongoing cost volatility. Directors and owners that can access funding while protecting against the risk of signing a personal guarantee, will be better placed to take on new work with confidence.”

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