New research shows that seven in ten SME owners are looking for finance this year to help them grow - with younger entrepreneurs leading the way.
A survey of small firms conducted by Purbeck Insurance Services has found that more than 70% of small business managers/owners questioned have either secured or plan to secure funding for their business in 2025, a big jump from 30% in 2024.
Demand for finance is highest among younger business owners aged 25-34, with 76% of this age group planning to get funding this year. The findings show that most business owners are planning to invest in new technology and buy equipment; other reasons for securing finance include:
- to support cash flow (cited by 41% - up from 32% in 2024)
- to fund a business acquisition (28%)
- to pay off outstanding debts (20%)
The amount of finance typically being secured is £100,000-£200,000; only around 9% of businesses surveyed were seeking less than £50,000.
Half of these are prepared to put their own assets on the line for their business by signing a personal guarantee - in fact, 50% of those surveyed are already personal guarantors for a business loan or have plans to become one in 2025. This rises to 76% amongst 25-34 year-old small business owner/managers.
The results suggest that younger business owners are more likely to know about the benefits of personal guarantee insurance (PGI) to mitigate the risk to their personal assets. The survey found that 75% of 25-34 year-olds have heard of personal guarantee insurance, compared to 47% of 45-54 year-olds.
"Despite reports of a slide in business confidence among UK SMEs, many remain sanguine about the need to invest for growth. Add to this the fact that more than half of those seeking funding are willing to put their personal assets on the line, and we begin to see a picture where UK SMEs still have a positive appetite for managed risk to better their businesses. Challenges lie ahead, particularly with rising tax costs and increased labour burdens following last November's budget, which will impact many SMEs. However, the encouraging sign is that many businesses are exploring new financing opportunities this year, signalling optimism and potential growth for the UK economy." Todd Davison, managing director, Purbeck Personal Guarantee Insurance.
The survey also reveals that businesses in the North East, Scotland and Wales are most likely to be looking for finance.
Written by Rachel Miller.