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The credit card catch that puts directors’ homes at risk

ended 26. August 2026

Flexible finance, including small business credit cards, remains the most frequently
used type of borrowing among UK SMEs, according to the British Business Bank. 

Yet Purbeck Insurance Services – the UK's only provider of personal guarantee insurance for SME owners – warns that most directors sign up for this everyday form of finance without realising it carries exactly the same personal risk as a six-figure business loan.

The warning comes as creditors' voluntary liquidations 2 (CVLs) rose almost 9% in July 2026 compared with June, according to the latest Insolvency Service figures. Purbeck says many directors are only discovering the true extent of their personal financial exposure once it's too late.

The majority of small business credit cards require a personal guarantee as standard, meaning the director — not just the company — is on the hook if the business can't pay. Purbeck's own casework shows many directors sign the application without registering the clause, assuming their limited company status protects them the way it does for other business debts.

  • Do you have a company business card and are you aware that most require (or will have) a personal guarantee? 
  • Were you aware that PG insurance existed? 
  • Have you ever used it?

Responses asap.

2 responses from the Newspage community

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Editor
Harvey Dhillon
Founder & CEO at Zmartly
A personal guarantee is not the small print. It is the reason you were lent the money at all. Most small companies have no track record to lend against, so the director's signature is the security. Remove it and most of that credit goes too.

Limited liability caps what you can lose at what you put into the company. A guarantee sits outside that cap, because it is a separate promise from you to the lender. When the company cannot pay, the lender comes to you, and limited liability is no answer.

Of 1,931 company insolvencies in July, 1,497 were creditors' voluntary liquidations. That is a director closing their own company, exactly when a guarantee gets called in.

Yes, we hold a company card, and yes, I read the guarantee before signing. I knew the insurance existed and have never bought it. Whether it is worth the premium depends on the size of the guarantee, which is a broker's question.

Know what you have signed, and what it would cost you.
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Editor
Tony Sanchez
Founder at Bridging Loan Directory
I have a company credit card, but I was not aware that it might carry a personal guarantee. Like many directors, I assumed the protection provided by operating through a limited company extended to routine card borrowing unless I had knowingly signed a separate guarantee.

I had recently become aware that personal-guarantee insurance existed, but thought it was principally relevant to business loans and overdrafts rather than an everyday company credit card. I have never used it.

This alert has prompted me to check the terms of my own card. That is probably the wider lesson: directors should not treat a business credit card as an ordinary administrative product. They should establish whether they have given a personal guarantee, what liability it creates and whether it remains appropriate as the balance or credit limit changes. A significant personal commitment should be made conspicuous, not left for directors to discover when their company is already in difficulty.