A significant number of small and medium-sized enterprises (SMEs) in the UK are turning to personal finances to fund their growth.
- 71% of SME decision-makers have used personal financial resources to support their businesses.
- Use of personal credit cards and savings has significantly increased compared to previous years.
- A growing number of SMEs are also exploring alternative financial options.
- The rising cost of business operations remains a key concern for these businesses.
A recent study by Shawbrook highlights a notable trend among UK SMEs, with 71% of decision-makers resorting to personal finances to fuel business growth. This includes personal credit cards and savings, which have seen a significant rise in usage.
The research indicates a marked increase in SMEs utilising personal credit cards and savings compared to last year, reflecting a 13% and 15% rise, respectively. The use of personal loans has also surged by 8%, demonstrating the financial pressures these enterprises face.
It is not only smaller SMEs feeling this pinch; larger firms with 100 to 249 employees also report substantial reliance on personal financial resources. Over half of these businesses have used their personal credit cards, nearly half have tapped into savings, and a significant portion has taken personal loans.
Despite this dependence on personal funds, there is an encouraging rise in the exploration of alternative finance options. This year, 78% of SMEs accessed these alternatives, up from 73% in 2023. Products like invoice finance, asset finance, and commercial loan facilities are gaining traction.
Business leaders remain apprehensive about the escalating cost of operations, with 73% expressing concerns similar to those raised last year. SME leaders continue to navigate a challenging economic landscape, searching for viable financing strategies.
The shift toward alternative financing options among SMEs offers a positive outlook amidst rising operational costs.
