Small Businesses Self-Finance 
According to recent research, more than a quarter of entrepreneurs have been forced to turn to friends and family for finance for their business, while more than 10 per cent have re-mortgaged their homes.

Rising prices and the cost of business financing are adversely affecting the private lives and personal finances of many SME owners, according to a new study by the Centre for Economic and Business Research.

The research was conducted among owners and managing directors of 750 UK small businesses with twenty employees or less and reveals that almost half of small businesses have had no choice but to inject additional cash into their company from personal sources this year.

The vast majority of small businesses currently view the UK as an “unbearably expensive'” place to do business and many are finding they can only survive by supplementing the company with personal finances.

Almost a third have had to turn to personal sources for a loan to cover spiralling costs, while around a quarter have taken out a personal overdraft, bank loan or credit card specifically for a cash injection into their business.

Some small business owners have been pushed into even more extreme measures, with 13 per cent going as far as re-mortgaging their homes.

It is hardly surprising news to find that small business owners are self-financing, as according to a recent FSB member survey, of the 20 per cent of small firms that had applied for credit in the 12 months to June this year, a third have been refused.

According to the research, the average amount raised from all personal channels stands at just over £20,400 per business. However this figure is much higher in some sectors, such as dental and medical surgeries, whose borrowing averages £120,000.

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