Small businesses need to explore finance options available to them
Research from Hitachi Capital Business Finance has shown that small businesses need to explore the wide range of finance options available to them.
The study found that start-ups are nearly twice as likely to use personal savings as those that have been in business for a decade or more, suggesting that small businesses in the UK are not seeking support from high street lenders.
The study also showed that small businesses are more ambitious than older companies when it comes to their growth plans, with 14% predicting business growth in the next three months compared to 3% of businesses that have been trading for longer.
The top forms of finance for small businesses over the past 12 months were revealed in the research, with more than 35% of start-ups using personal finances and 15% relying on money from family members.
Eleven percent of small businesses used overdrafts to support their business over the past year, whilst 5% relied on government support such as finance loans and grants, and 5% used a standard business bank loan.
Alternative forms of finance also made the list, with invoice finance and peer-to-peer lending being used by 4% and 3% of small businesses respectively.
Commenting on the research, Hitachi Capital Business Finance Managing Director Gavin Wraith-Carter stated that the issue is not small businesses being turned down for finance, but the fact that too many start-up companies do not trust institutions and so are not turning to them for financial support
He added that today, however, there has never been more finance options available to small businesses, with companies having more choice regarding the variety of products available and the range of providers beyond the traditional high street lenders.
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