Entrepreneurs forced to find extra cash to survive
MORE than a third of entrepreneurs have had to dip into personal savings to deal with cash flow issues within their businesses in the past year, a survey has revealed.
One in ten business founders has also had to resort to taking out short-term loans to tide their companies over, according to the Enterprise Ladder Report.
Almost a quarter of business owners surveyed said they had seen their shareholding diluted as a result of taking on new investors or selling a stake in their business to raise cash.
The survey also found that self-funded micro, small and medium-sized businesses require an average of £94,000 start-up capital to get their companies going. Those firms that have needed to take out a loan have had a higher average launch cost of £127,992 of which they have borrowed £84,500.
Paul Aitken, chief executive of finance group Borro, which carried out the survey, said: “With 2012 perceived as being one of the toughest years yet to either launch a small business or keep one afloat, SME owners are increasingly having a look at alternative ways to secure the finance they need.
“It is a real worry to see that the outlook for SMEs is so grim. For those that take the time and effort to start up a business, it is only fair that they are rewarded.”
Last month conflicting claims emerged over ease of access to finance for small and medium-sized firms (SMEs) in Scotland after a Scottish Government survey revealed that the vast majority of businesses were receiving the funding they were applying for, which the Institute of Directors Scotland described as “very surprising”.
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Wednesday 19 June 2013
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