One in eight entrepreneurs use personal credit cards to finance their business

25% of UK business owners have used overdraft facilities in the past year with companies in the North East most reliant on personal credit facilities

One in every eight (13%) small and medium-sized business owners in the UK has used a credit card or personal loan to fund the growth of their company in the past 12 months, according to research from Santander Corporate & Commercial.

The Access to Finance study, which surveyed 683 senior business leaders at UK firms, revealed that 25% of respondents had taken out an overdraft to fund their business in the last year.

Businesses in the North East were found to be the most reliant on personal credit, with double the national average (26%) of business owners in the region having used it to finance their company. This was followed by the East of England (21%), while the North West (8%) and West Midlands (7%) were the least reliant.

Over two-fifths (43%) of respondents said they were concerned about cash flow problems over the next 12 months, with late payments cited as the biggest concern. Cash flow worries were most prevalent in London where 38% of businesses raised concerns for the coming year.

Mike Reeves, joint managing director of small business banking at Santander, said:

“It’s worrying to see that many of Britain’s small firms are relying on personal credit facilities to finance their businesses, and are concerned over effectively managing cash flow.”

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