4 min read • published in partnership with Purbeck Insurance Services
Confidence with caution: How manufacturers are balancing risk and reward with Personal Guarantee Insurance
The mood in UK manufacturing is shifting from survival to selective growth. In this article, Todd Davison from Purbeck Personal Guarantee Insurance, explains how the sector’s renewed optimism is being matched by a sharper focus on financial resilience — and why tools like PGI are becoming part of prudent investment strategy.
Confidence is creeping back into British manufacturing. After several years of supply-chain shocks, volatile energy prices and rising borrowing costs, investment sentiment has finally begun to turn a corner. According to the recently released Make UK / RSM UK Investment Monitor 2025, the Government’s Industrial Strategy could deliver an immediate boost to manufacturing investment, with over a third (37%) of companies saying they will accelerate capital projects as a direct result of the announcement.
Three-quarters of manufacturers expect to benefit from measures within the Advanced Manufacturing Plan, designed to support innovation, technology adoption and sustainability. On paper, it looks like a sector ready to build again.
Yet, the same data introduces a note of caution. Investment intensity — the share of turnover ploughed back into business growth — has slipped to its lowest level since the EU referendum, after hitting a ten-year high just a year ago. R&D intensity has also edged down to 6.2%.
In other words, manufacturers are optimistic, but selective: choosing projects carefully, managing cashflow tightly and focusing on resilience as much as expansion.
That blend of confidence and caution is exactly what is being mirrored in another, less-discussed part of the market — the growing use of Personal Guarantee Insurance (PGI).
A growing safety net for manufacturing directors
Over the past two years, Purbeck Insurance Services has seen a steady rise in PGI usage among manufacturers, as business owners seek to balance risk with opportunity.
PGI protects company directors who have signed a personal guarantee on a business loan — covering a significant portion (80%) of their liability should the firm fail. In a climate where lenders often require such guarantees to unlock credit, this insurance acts as a safety valve, enabling investment to proceed without exposing personal assets such as homes or personal savings.
Typically, the insurance protects personal guarantees between £25,000 and £150,000, aligned with the lending limits common to working-capital facilities, machinery purchases and growth loans, but can go up to £550,00.
PGI adoption is no longer in its infancy — it’s now embedded in how many manufacturing leaders approach risk.
Who is using PGI — and why
The typical manufacturing director seeking PGI is 48 years old, running a well-established company that’s been in existence for on average, 16 years — the youngest that figure has ever been. Most applicants are male, though female representation is gradually increasing.
This combination of maturity and renewed youth is telling. It suggests a new generation of ambitious but financially astute leaders — owners who want to invest in growth but refuse to gamble with personal security. Interestingly, only 5% of manufacturing firms using PGI are under two years old, which indicates that established SMEs, not start-ups, are leading this adoption.
Their reasons are often rooted in experience. 16% of the directors we have supported in 2025 have a history of insolvency. It’s a small but significant signal that many business owners are applying lessons learned the hard way. They understand that one unforeseen event — a lost contract, a delayed payment, or an external shock — can jeopardise both business and personal wealth.
Funding the future — with foresight
Manufacturers use a range of finance structures, and the PGI used to protect directors mirrors that diversity. As of Q3 2025:
• 43% of PGI-backed loans were unsecured,
• 21% were secured loans,
• 13% involved invoice finance, and
• 9% were linked to asset finance.
The dominance of unsecured borrowing reflects how much of manufacturing’s investment now lies in agility — funding innovation, digital upgrades and working-capital flexibility rather than only hard assets.
Connecting PGI to the Industrial Strategy
The Industrial Strategy and Advanced Manufacturing Plan have re-ignited optimism. With the Government signalling long-term commitment to the sector, many firms are planning to bring forward investment in automation, AI-driven processes and green manufacturing.
Yet rising interest rates and squeezed margins mean that even confident directors are operating within tighter financial frameworks.
That’s where PGI plays a supporting role. It complements policy ambition by reducing the personal fear factor that often stalls investment. A director may believe in an automation upgrade or a new product line, but without PGI, the prospect of signing a six-figure guarantee could be a deal-breaker.
The Make UK data underlines why that balance matters. While 37% of firms plan to invest more, many remain constrained by falling reinvestment ratios. In this environment, mechanisms that protect individuals — not just businesses — can unlock otherwise cautious capital.
Confidence that builds, not breaks
The story emerging from the manufacturing sector is one of confidence with caution — optimism grounded in discipline. Yes, investment momentum is building: factories are modernising, digital projects are being revived, and capital spending is on the rise. But beneath that, there’s a deeper maturity — a recognition that sustainable growth requires not only boldness but protection.
Personal Guarantee Insurance is enabling that mindset. It’s giving business leaders the assurance to invest in innovation, people and equipment — knowing that their personal future is safeguarded if things don’t go to plan.
Manufacturing has always been about precision. Today, that precision extends beyond the production line to financial decision-making itself. By embracing tools like PGI, manufacturers are proving that Britain’s industrial resilience isn’t just built on machines and materials — it’s built on measured confidence.
For more information on how Purbeck supports SME manufacturers, visit: Purbeck Insurance Services
