Owners ready to consider personal loans
NEARLY a third of business owner-managers in the East of England would take out a person loan to fund their venture, according to a survey by Close Invoice Finance, part of merchant banking group, Close Brothers Group plc.
NEARLY a third of business owner-managers in the East of England would take out a person loan to fund their venture, according to a survey by Close Invoice Finance, part of merchant banking group, Close Brothers Group plc.
If the figure was reflected across the small and medium sized enterprise (SME) sector, it would represented some 154,000 businesses in the region.
The latest Close Small Business Finance Barometer, based on a survey of more than 500 small and medium sized enterprises, also found that nearly one in 10 (7%) of SME owners admitted that in desperate times they would even use a credit card to fund their business.
In last year's survey, one in 10 of those surveyed from the East said they would approach family and friends if bank funding dried up. This has now doubled with 20% of businesses relying on those closest to them for financial support.
David Thomson, chief executive of Close Invoice Finance, said: “SMEs continue to feel the effects of the lack of funding available from traditional sources. This has forced more and more SME owner managers to pursue risky short term strategies to secure cashflow and in the process, put themselves and those closest to them, under intense pressure.”
He added: “SMEs need to consider every route available to free up capital and, at the same time, be deadly serious about tackling late payment to safeguard the long term health of their business. Cashflow management tools can give companies complete peace of mind and provide protection against the impact of issues such as late payment and even bad debt.”
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Invoice finance is an alternative route to securing funding that allows companies to raise money against their sales ledger, affording businesses a greater degree of flexibility and control over their cash flow.
