The Guardian has reported that banks are asking small suppliers in Jaguar Land Rover’s (JLR) supply chain to put their family homes on the line to secure emergency loans, highlighting the growing reliance on personal guarantees in UK business finance.
A month after a crippling cyber-attack forced JLR to halt production, the carmaker’s smaller suppliers warn they are on the brink of collapse. With no direct government support on offer, some firms say banks are only willing to lend if owners provide personal guarantees – pledging their houses or other assets as security.
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Michael Beese, managing director of Genex UK, which supplies pressed metal parts for JLR, told the Guardian that lenders had quoted interest rates of up to 16% and demanded personal guarantees.
“Why should I put my business and family home on the line when I’ve done nothing wrong?” he said, adding that cash shortages had already forced him to lay off some of his 17 workers.
The Confederation of British Metalforming (CBM), which represents many JLR suppliers, warned that without urgent support, the UK automotive supply chain could face “irreversible damage.” Steve Morley, CBM president, told the Guardian that while JLR’s efforts to provide advance payments to first-tier suppliers were welcome, smaller firms deeper in the supply chain faced “little prospect” of short-term funding.
In response to the crisis, last week the UK government stepped in by offering a £1.5 billion loan guarantee backing JLR’s borrowing, intended to bolster the supply chain through liquidity support. Under the scheme, the state would underwrite part of JLR’s debt, giving lenders greater confidence to extend credit. However, industry critics argue that it may do little for second- or third-tier suppliers, who may not benefit before insolvencies begin. The guarantee, while significant, is seen by some as too indirect and too slow to reach the small firms facing immediate collapse.
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By GlobalDataThe growing reliance on personal guarantees is reflected in national lending data. According to Purbeck Insurance Services, the UK’s only provider of personal guarantee insurance, the average loan secured with a personal guarantee rose to £289,827 in Q3 2025, up from £204,035 in the same quarter last year – a 42% increase. Among young businesses under two years old, the average loan reached £155,257, the highest value recorded to date and a 64% jump on £94,265 in Q3 2024.
Purbeck also reported that applications for personal guarantee insurance reached record levels in September 2025, climbing 16% across the third quarter. The company said the surge suggests that business owners are becoming more shrewd about the risks of signing personal guarantees, recognising they are difficult to avoid when securing finance, and are increasingly seeking protection to limit their exposure.
Industry sources told the Guardian that the government’s loan guarantee may not reach second- and third-tier suppliers in time, given the long chains and up to 60-day payment terms. Some suppliers have called for ministers to consider direct support measures such as tax deferrals, wage subsidies or direct injections via the British Business Bank’s guarantee schemes.
