The number of business owners confident of securing bank funding has plummeted from 73 to six per cent over the past year, according to research.
The number of business owners confident of being able to secure bank funding has plummeted from 73 to six per cent over the past year, according to a poll.
One in ten owners of small and medium-sized enterprises (SMEs) is turning to family and friends for cash, six times as many as 12 months ago, according to the survey of 505 business owners from asset-based lender Close Invoice Finance.
That implies that 540,000 businesses across the UK are borrowing from family and friends to keep afloat.
‘The relationship between banks and SMEs has collapsed, with severe repercussions for the sector as a whole,’ says David Thompson, CEO of Close Invoice Finance.
‘With banks now closing their doors to SMEs, owners are relying on friends and family for financial support, placing immense pressure on these most precious relationships,’ adds Thompson.
Last month the government set aside £10 billion to guarantee £20 billion of bank loans to businesses with sales of up to £500 million.