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August 2025: Purbeck Insurance Services, the UK’s only provider of Personal Guarantee Insurance for SME business owners, has welcomed the UK Government’s announcement of the most significant legislative reforms in 25 years to tackle late payments, describing the move as “long overdue.”
The reforms, unveiled as part of the Government’s Small Business Plan, will introduce:
- Maximum payment terms of 45 days
- Empowerment of the Small Business Commissioner to issue fines and conduct spot checks
- Enforcement of a 30-day invoice verification period
Todd Davison, Managing Director of Purbeck Insurance Services, commented:
“These reforms are long overdue. For too long, SMEs have been forced to bankroll their customers, with late payments causing serious cashflow issues and forcing many to take out personal guarantee-backed loans just to stay afloat. The new laws will finally give small businesses the protection they deserve and help level the playing field.”
Purbeck’s own research underscores the urgency of the issue:
- 77% of SMEs are owed money by late-paying customers
- Average unpaid invoices range from £8,441 for micro businesses to £22,102 for larger SMEs
- Firms in Greater London, Scotland, and the West Midlands are among the worst affected
- 60% of SMEs say late payment is harming their business
According to Purbeck’s Q2 2025 Personal Guarantee Insurance Monitor:
- Average personal guarantee demand for a small business loan has risen to £194,499
- Applications for personal guarantee insurance grew by 3.2% year on year
- June 2025 was a record month for Personal Guarantee Insurance (PGI) applications, up 17.8% on June 2024
Davison added: “While we’re seeing signs of confidence returning to the SME sector, the burden of personal guarantees remains high. These new laws will help reduce the need for emergency borrowing and allow SMEs to focus on growth rather than survival. We urge the Government to implement these reforms swiftly and ensure robust enforcement.”
Purbeck continues to advocate for SMEs to protect themselves with Personal Guarantee Insurance when securing finance, especially in uncertain economic conditions.
