Personal guarantee insurance helps business bounce back following cash crisis

David Parr, finance director of Xtreme360, said: “Cash flow kills businesses and I could see this was becoming a real danger for us. We had started this business with the best of intentions, but costs escalated and until the asset finance was paid off, we would be operating at a loss.

“We contacted Purbeck who helped us think through our options objectively. They introduced us to a finance broker to look at refinancing the debts; discussed the option of sub-letting excess space within the premises; and introduced capital allowances experts. They also put us in touch with one of Purbeck’s other clients who ran a franchised trampoline park to discuss best practices.”

The team worked out a restructuring of the finance arrangements and attracted a new investor.

Parr added: “Our debts are now settled, which is a considerable weight lifted after three years of considerable stress. The business is in excellent shape, very much a going concern and with growth plans working well.

“Knowing that the personal guarantee insurance was in place created valuable peace of mind during a very difficult time. Purbeck did as much as they could to help us avoid defaulting on the loan.”

Close to one-third of SMEs have found that the cash flow burden has worsened over the last year according to a survey by the insurer.

Todd Davison (pictured), director of Purbeck Insurance Services said: “Xtreme360’s experience as a start-up is far from unique. It’s vital that directors of small businesses look at ways they can mitigate the risk to their personal assets if they take a personal guarantee-backed loan.

“We also know that in many instances there are ways through the trading problems our policyholders face and we will do our utmost to support them.”