A survey carried out by borro.co.uk reveals that an increased number of small business owners are willing to risk their home to ensure the survival of their business. More than 10 percent of the 300 directors and owners of Small and Medium Enterprises said they would risk their home to save their business.
The research also revealed that 33 percent would put their home forward as collateral for a business loan if they were facing severe difficulties, like not being able to pay employees or problems with cash flow. The research shows that there are almost as many business owners applying for a secured loan as there are applying for an overdraft facility or unsecured loan. This may be a result of the lending criteria by banks becoming much tougher in the face of economic difficulties.
CEO of borro, Paul Aitken said:
“It’s surprising to see that as many small business owners would consider applying for a secured loan as would apply for an unsecured loan or an overdraft, a sign that as banks continue to make it hard to access unsecured lending facilities, so those that require property as security become the next thing to turn to.”
Almost a quarter of the respondents believe they have missed opportunities for growth due to not being able to secure business finance, while 67 percent believe that criteria for lending should be relaxed by the banks. Just over a quarter of business owners are looking at other ways to obtain finance, using personal possessions like antiques, jewellery and cars to secure business funding.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox