Brexit Puts Thousands of Company Directors ‘At Risk’ with Personal Guarantees for Finance

This month CEO Today spoke to Bespoke Risk Solutions about their new a facility, together with Purbeck Insurance Services that might provide Company Directors with insurance cover in the event of a call on their personal guarantee by a lender.

In July this year, the Independent reported that the ‘whole EU finance system faces a tipping point’. With financial institutions quitting the City of London, businesses will see opportunities to access lending diminish. Peter Collins, Manging Director of Bespoke Risk Solutions commented: “The net result of this might be that in order to apply for finance, more and more Company Directors will need to offer personal guarantees.”

However, with every personal guarantee comes risk, and earlier this year, the Daily Telegraph reported on the number of Company Directors that are at risk because they do not fully understand the implications of the personal guarantee that they have undertaken on their own finance.

Personal guarantees are agreements that legally bind a business director to take a certain level of financial responsibility for their company’s debts, in the event that they cannot be paid back by the business itself. It is anticipated that post-Brexit, organisations will seek a higher level of personal guarantees, as they become increasingly ‘pickier’ about whom they lend to. However, in the unfortunate event the business becomes insolvent, the lender may call on the Director’s personal guarantee to recover any shortfalls due on the finance obligations that the business owes to the lender.

Start-ups could also suffer, as European funding pots, such as the European Regional Development and Single Local Growth Funds will disappear post-Brexit, which will mean that they will have to seek finance from high-street lenders.

Recognising this trend, Bespoke Risk Solutions has partnered with Purbeck and now offers a Personal Guarantee Insurance facility, which will provide online indications to Directors that can qualify in minutes.

Bespoke Risk Solutions has carved out a niche in the insurance sector, providing tailor-made risk and insurance products, as well as review services for SME businesses and their advisers. The BRS Personal Guarantee Insurance facility is underwritten by Purbeck and is backed by an A-rated leading insurer.


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About Bespoke Risk Solutions:

With over 40 years combined expertise from professionals in the Insurance, Property, Shipping and Financial sector BRS’ knowledge allows the company to provide competitively priced solutions to meet their clients’ requirements. The firm was founded seven years ago, and is proud to be a privately-owned company. 

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