Bullish young business owners lead the charge to secure finance in 2025

• 70% of SMEs want to secure funding for their business this year, up from 30% in 2024
• Demand is highest amongst younger business managers/directors – 76% plan to secure finance this year.
• Most SMEs plan to invest in new technology and equipment
• Hunger for finance biggest in The North East, Scotland and Wales

The flatlining of the UK economy has done nothing to dampen the appetite for growth and investment in new technology by young and confident small business managers, according to a survey by Purbeck Insurance Services ⁱ), the provider of personal guarantee insurance to small business owners. 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 2024ⁱⁱ). What’s more, over half of these (51%) are prepared to put their own assets on the line for their business by signing a personal guarantee.

41% need finance to support cashflow

Demand is highest among younger business owners aged 25-34, 76% of whom plan to secure finance this year. As the Federation for Small Businesses (FSB) reports a plunge in confidence amongst small business owners ⁱⁱⁱ), Purbeck’s findings offer a more positive view.  Indeed, the key reason given by those small businesses securing finance this year is to invest in new technology, closely followed by obtaining new equipment. Furthermore, 28% need funding for a business acquisition. However, 41% need it to support cashflow, up from 32% in 2024, and 20% to pay off outstanding debt.

Demonstrating the sureness of UK small businesses still further, the amount of finance typically being secured is £100-£200k, only around 9% of businesses surveyed were seeking less than £50k.

As the Government continues to push Nations and Regions investment funds^iv), Purbeck’s survey also highlights that the hunger to secure finance is most evident in the North East, Scotland and Wales. 

More younger owner/managers become personal guarantors

Meanwhile, 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 25-24 year old small business owner/managers. This figure could reflect the fact 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 PGI, compared to 47% of 45-54 year-olds.

Comments Todd Davison, MD of Purbeck Personal Guarantee Insurance: “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.”

When securing a new personal guarantee backed loan, it is always advisable to secure personal guarantee insurance, meaning the business owners’ and directors’ personal finances won’t be at risk in the unfortunate situation of a business failure.

^[i] Survey of 500 SME business decision makers, February 2025, by Censuswide

^[ii] Survey conducted amongst 400 owners and managers of small businesses across the UK, 3^rd January 2024 via Maru/hub

^[iii] https://www.fsb.org.uk/resources-page/small-firms-blues-show-how-much-government-growth-push-is-needed.html

^[iv] https://www.british-business-bank.co.uk/finance-options/nations-and-regions-investment-funds#:~:text=The%20Nations%20and%20Regions%20Investment,growing%20businesses%20in%20the%20UK.&text=For%20a%20sustainable%20and%20prosperous,the%20UK%20need%20to%20thrive