LONDON, UK / ACCESS Newswire / January 21, 2026 / Purbeck Insurance Services has published new analysis indicating that small businesses focused more heavily on cashflow support than growth-related borrowing during the final quarter of 2025, reflecting a cautious approach to finance decisions at the end of the year.

The analysis is based on personal guarantee insurance application data associated with new lending activity. During Q4 2025, working capital was the most common reason for borrowing, accounting for a larger share of applications than in the same period one year earlier. This pattern suggests that maintaining liquidity and managing day-to-day financial obligations remained a central consideration for many small businesses as the year closed.

Applications linked to expansion, investment, or growth showed less momentum during the quarter. Borrowing activity overall remained steady compared with the previous quarter, indicating that demand for finance neither increased nor declined materially as businesses moved toward year end. The balance between stable application volumes and shifting borrowing purposes highlights a period marked by consolidation rather than acceleration.

Average loan sizes associated with personal guarantee backed borrowing increased during Q4 2025 compared with the prior year. This change aligns with broader cost pressures affecting businesses across multiple sectors and may reflect higher funding requirements to support routine operations. The increase in average loan values occurred even as overall application numbers remained broadly unchanged, pointing to changes in the scale rather than the frequency of borrowing.

Sector-level trends during the quarter showed variation. Applications connected to construction activity rose between the third and fourth quarters of 2025, while manufacturing-related applications declined over the same period. These movements suggest differences in financing needs tied to operational timelines, contract structures, and investment cycles rather than a uniform shift across the small business landscape.

When viewed across the full year, total applications for personal guarantee backed borrowing in 2025 exceeded those recorded in 2024. However, activity was weighted more heavily toward the earlier part of the year, with Q4 showing a more measured pace. This distribution indicates that borrowing decisions became more selective as the year progressed.

The data reflects how small businesses approached the transition into 2026 with an emphasis on stability. Cashflow support remained a priority as businesses balanced ongoing expenses with uncertain economic conditions. Borrowing patterns observed during Q4 2025 suggest a preference for short-term resilience over long-term expansion commitments.

Purbeck Insurance Services' analysis provides insight into how small business finance behaviour evolved during the latter part of the year, highlighting the role of cashflow management in shaping borrowing decisions as businesses prepared for the year ahead.

About Purbeck Insurance Services

Purbeck Insurance Services specialises in personal guarantee insurance for small and medium-sized enterprises. The company supports businesses accessing finance where personal guarantees form part of lending arrangements, with a focus on providing insurance solutions linked to business borrowing.

MEDIA DETAIL

Contact Person Name: Alison Reeson
Company Name: Purbeck Insurance Services
Email: purbeck@harrisonsadler.com
Website: https://www.purbeckinsurance.co.uk/

SOURCE: Purbeck Insurance Services