Female SME Borrowing Surges, Yet Funding Gap Persists
Recent data reveals a significant 51% increase in borrowing activity among female SME business owners in 2025. However, the same data shows that only 1 in 10 entrepreneurs using external funding and seeking insurance from Purbeck are female. This highlights the persistent hurdles that female founders face when attempting to access and manage finance.
Personal Guarantee Insurance (PGI) is commonly secured by directors when obtaining funding backed by a personal guarantee. This makes it a key indicator of real-world borrowing behaviour.
Key Points from Purbeck’s Analysis
Purbeck’s detailed analysis reveals that:
- There was a 51% increase in PGI applications from female business owners in 2025 compared to 2024.
- In 2025 alone, female founders borrowed £42 million via personal guarantee-backed loans and acquired insurance to offset the risk.
- Female owner/directors constitute a mere 10% of all entrepreneurs with personal guarantee insurance.
Focus on Cashflow Resilience
Despite the surge in applications, borrowing among female-led SMEs largely remains defensive. About 35% of applications in Q4 2025 were for working capital, reflecting the need to manage elevated costs and economic instability. A smaller proportion, 17%, was linked to investment in growth initiatives.
Average Loan Value Indicates Market Volatility and Pressure
The average loan value for female SME applicants rose to £131,933 in Q4 2025, up from £108,811 in Q3 2025. However, this is still less than the £163,616 recorded in Q4 2024. This fluctuation reflects the varying funding needs as businesses adapt to inflationary pressures, increased operating costs, and inconsistent confidence levels. By contrast, the average loan size across the wider SME market showed a year-on-year increase in Q4 2025, suggesting female business owners may be taking a more cautious approach to borrowing.
Gender Disparities in Business Finance
The surge in applications comes against a backdrop of ongoing debates about gender disparities in business finance. Research consistently shows that female founders encounter systemic challenges when accessing finance, particularly in venture capital and external lending. Female entrepreneurs tend to self-fund, borrow conservatively, and prioritise financial resilience. However, targeted initiatives are beginning to raise visibility and support for female entrepreneurs.
Todd Davison, managing director of Purbeck Insurance Services, emphasised the need for more proactive measures:
“With International Women’s Day highlighting economic equality, our data underscores the need for lenders and policymakers to do more to level the playing field for female-led businesses. The 51% increase in applications for PGI shows more women are actively engaging with funding, but they still significantly trail men in the overall borrowing activity we see amongst SMEs.”
“While most loans taken by female founders are for working capital, what’s encouraging is that we’re also witnessing signs of selective investment for growth. As funding conditions improve, ensuring fair access to finance — and tools like personal guarantee insurance that can mitigate personal risk — will be instrumental in supporting female-led businesses to scale with confidence.”
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