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SMALL BUSINESS OWNERS USE HOMES TO SECURE LOANS
Posted on 15th Jan 2012 in News
New research has revealed that a worrying number of small businesses are being driven to use personal assets to guarantee the funding they need to keep afloat.The survey of over 300 owners and directors of SMEs by borro found that 12% have put their homes on the line, whilst a further 33% have considered doing so if they are unable to obtain finance any other way. This compares with those considering an unsecured loan (38%) and a bank overdraft (33%).
57% of small businesses owners and directors have used personal finances to fund their businesses and 17% have borrowed money from friends and family. 24% of SMEs say they have missed out on opportunities for growth due to lack of funds.
Paul Aitken, CEO of borro, comments: "Using your family home as a guarantee for a loan is a huge step for a small business owner and can be risky in this uncertain economic climate but it seems many feel they have no other choice. It's surprising to see that as many small business owners would consider applying for a secured loan as would apply for an unsecured loan or an overdraft, a sign that as banks continue to make it hard to access unsecured lending facilities, so those that require property as security become the next thing to turn to."
However, there is a choice; SME Invoice Finance enables small businesses owners to release the value of their invoices from day one, giving them the valuable cash flow they need to achieve their potential - without endangering the roofs over their heads.
