Some have used personal or family finances for business purposes
Nearly six in 10 (57%) small and medium-sized enterprises (SMEs) are struggling to access finance from banks and other lenders, according to YouGov’s new study.
The study, commissioned by small business lending specialist Prospa, also found that 55% of small business owners that tried to access funding from lenders failed to grow their business because they could not access funding when they needed it.
Meanwhile, 69% have used personal or family finances for their business, with nearly two in three (65%) saying they used personal savings and nearly four in 10 (39%) using personal credit cards. Just under one in four (24%) have borrowed from family and friends, and 21% have drawn down on a mortgage.
The study also found that millennial small business owners (72%) were more likely than their baby boomer counterparts (46%) to say that they have missed out on business opportunities due to funding difficulties.
Adrienne Church, Prospa’s general manager for New Zealand, emphasised that lack of funding could force businesses to remain in limbo, go backwards, or fall into the traps of blurring business and personal finances.
“Small businesses need funding to move forward, whether that’s hiring new employees, buying new equipment, or rolling out new goods and services,” Church said.
“Many small businesses still don’t realise they have viable alternatives to banks and traditional lenders, and, as a result, they are missing out on opportunities to grow and invest in their own success.
“Non-bank lenders like Prospa are designed to solve these small business pain points. We use data-driven technology to assess risk, can provide a response and funding within 24 hours, and don’t require asset security upfront to access funding. As 2021 kicks off, improving the flow of credit to small businesses will be more important than ever for driving small business recovery, and the non-bank sector has a crucial role to play,” Church concluded.
