Over one million entrepreneurs “shunned” by mainstream lenders
73,000 businesses have never come to fruition because they couldn't access finance - more business owners turn to friends and family for funding
More than one million UK sole traders have been turned down for mainstream finance and almost a third have been rejected for a bank loan, according to research by Amigo Loans.
The survey of 500 sole traders revealed that more than one in 20 of those that had been refused a traditional loan did not seek funding elsewhere, meaning a potential 73,000 businesses never came to fruition because they couldn’t access finance.
Two fifths (40%) of the business owners surveyed said they had turned to family for financial support while 30% had secured investment from friends. Another two fifths (42%) of respondents admitted using their overdraft for start-up finance, despite overdraft fees hitting record highs.
Rather alarmingly, a quarter of sole traders that had been refused a loan claimed they would have stood a better chance of securing funding from a stranger on the street.
Glen Crawford, CEO of Amigo Loans, commented:
“It’s a disgrace that the people who keep our society operating, the mobile hairdressers, the wedding photographers, cleaners, cafe owners, mechanics, driving instructors and a whole host of other ambitious sole traders are being alienated by banks – the bankers have forgotten why they exist.”