Harsh personal guarantees will chill growth ambitions, warns FSB

Personal guarantees risk holding back the growth the economy needs, the Federation of Small Businesses (FSB) has warned.

Research by the FSB shows that 60% of limited company directors would borrow to grow their business – if they did not have to put hard-earned assets like savings or their houses on the line.

By contrast, only 13% would go ahead if a personal guarantee is required.

The FSB says the practice is now widespread, with 78% of directors who applied for finance being asked for a personal guarantee. Faced with this, a quarter decided not to take up finance at all.

The FSB is now calling on the government to close the Financial Conduct Authority (FCA) loophole that leaves these loans unregulated and unsupervised by banks.

It says that without action, would-be entrepreneurs could be deterred from starting up, with personal risk outweighing ambition and ideas left unrealised.

Tina McKenzie, Policy Chair of the FSB, said:

'Personal guarantees should never be the default setting – they must be a last resort, used with care and absolutely necessary. If we are serious about building a climate where small firms can thrive and new ideas can take root, we need to rein in their overuse.

'Otherwise, the speed of small business growth will slow to a snail's pace at a time we need it the most, and we risk turning away a wealth of entrepreneurial talent.'

Internet link: FSB

Home | Contact us | Site map | Accessibility | Disclaimer | Privacy Policy | Help |

Company registered in England & Wales, number 06137832
The ICAEW audit registration number for Honey Barrett (Audit) Ltd is C005419803.
VAT No. 725 2398 29

powered by totalSOLUTION

© 2025 Honey Barrett Limited. All rights reserved. We use cookies on this website, you can find more information about cookies here.

The Registered office is: Honey Barrett Limited, 53 Gildredge Road, Eastbourne, East Sussex BN21 4SF

Honey Barrett Limited, 53 Gildredge Road, Eastbourne, East Sussex BN21 4SF
Bexhill Office : 48 St Leonards Road, Bexhill-on-Sea, East Sussex TN40 1JB
Wadhurst Office : Pharmacy Chambers, High Street, Wadhurst, East Sussex TN5 6AP