Turnaround in Confidence Amongst Construction Firms as 30% Secure Funding for Growth and Development, Q2 2024
July 2024: More builders and SME construction firms applied for finance to support growth and development in Quarter 2 2024 than at any other time in the past 18 months, according to the latest analysis by Purbeck Insurance Services – the UK’s only provider of personal guarantee insurance for small business loans.
30% of business owners in building and construction securing personal guarantee backed loans in Q2 were doing so for investment in growth initiatives and development, while loans secured for ‘Working Capital’ fell to 34% from 54% in Q1 2024. Although ‘Working Capital’ is still the main reason for securing finance and applying for Personal Guarantee Insurance, there has been a steady drop in construction firms needing finance for this reason since Q3 2021, based on Purbeck’s analysis.
This represents a big turnaround for the sector – two years ago in Q2 2022, just 16% of loans were for growth and development and over half (53%) were for working capital to keep the business going.
Todd Davison, MD of Purbeck Insurance Services said: “As the Government pledges to build 1.5mn homes in England over the next five years to “get Britain building again”, our data suggests renewed confidence amongst businesses in the sector, despite major challenges around skills availability. With fresh Government impetus, it will be interesting to see if the demand for finance to support growth and development continues on an upward trajectory. We must not forget that the owners of these businesses are signing a personal guarantee to secure the funding they need. Our analysis shows how Personal Guarantee Insurance is providing many with the confidence to take that vital step.”
