41% of small business owners inject personal money into their business

Figures come as confidence in bank lending falls to lowest ever level

Nearly half of all small business owners have injected personal funds into their business in the last 12 months, according to BDRC’s latest SME Finance Monitor.

The investigation into the activities of UK start-ups and small businesses, revealed that 41% had used personal money – with a quarter of these business owners saying they had no choice but to take this action.

The findings come as the survey further revealed that in the second quarter of 2012 confidence in bank lending fell to its lowest level since the Monitor began.

Of the small businesses with less than 10 employees who plan to apply for external finance in the next three months, just 37% felt confident of success – down from 52% at the beginning of the year.

The current instability of the economy continues to be seen as the biggest barrier to running a business, with 49% put off applying for funding for this reason.

However, only one in 10 start-ups and small businesses thought access to external funding was the biggest barrier to growing their business – with red tape and late payments listed as the most significant obstacles to running a small business (after the economy).

BDRC Continental’s director, Shiona Davies, said “Future appetite for external finance remains muted – primarily by the current economic environment.

“Our data shows that even special measures, such as the National Loan Guarantee Scheme, may only appeal to a minority of small businesses.”


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