External Finance

Third of Small Businesses Turn to Personal Funds in Favour of External Finance

Third of Small Businesses Turn to Personal Funds in Favour of External Finance

One in three small businesses are “digging into their own pockets” and rejecting external finance to grow their business, research from Hitachi Capital has indicated. The study of 1,000 small business owners found that, while 30% of businesses have used their own savings to fund growth in the last 12 months, 16% have opted to use overdrafts, and 7% have taken money from family and friends. In contrast, only 21% of small and medium-sized business owners have used external finance solutions such as loans, peer-to-peer lending, and invoice finance in the last year, despite the fact that cashflow was named as the biggest worry by those businesses surveyed. The research also highlighted some alarming findings for growth prospects among small business owners. Just 6% said they expect... »

Small Businesses Return to External Finance

Small Businesses Return to External Finance

Small businesses are increasingly returning to external sources of finance such as overdrafts or loans, according to a report by BDRC Continental. An analysis of 100,000 small enterprises since 2011, the study found that whilst use and demand for finance remained stable overall in 2015, 70% of small businesses are more likely to use external finance – up from 65% in 2014. 25% of the small enterprises surveyed said they plan to take advantage of external financein the future, up from just 21% in 2012. ‘Larger’ and ‘ambitious’ small businesses and those with younger managing directors were found to be most likely to use external finance to help their business grow. Last month, it was revealed that, despite a rise of 84% in 2015, the overall rate of growth of the alternative finance mar... »