According to a recent study carried out by BDRC, almost half the number of small company and start-up owners in the UK have used their personal money for business.
The SME Finance Monitor revealed these numbers as part of an extensive research and investigation which showed 41% of business owners spent their savings on keeping their company running.
The Finance Monitor is a study of the activities of small businesses as well as start-ups in the UK. It was also revealed that about 25% of the respondents claimed to have been left with no other option.
The findings of the survey revealed another truth about UK start-ups. During the second quarter of the year, the confidence and dependence on bank lending saw a steep fall.
Since the beginning of the Finance Monitor bank lending has been in decline, reaching its lowest levels in the year. Just a year ago, more than 50% of the small businesses with fewer than 10 employees were in hopes of receiving help. Currently, just over one-third of start-ups applying for financial help are positive of receiving support.
It claims the unstable economy in the UK has become a barrier to start-ups, deterring almost half the businesses from taking the first step. About 10% of start-ups in the UK believe accessing external funding is a barrier for their business' growth while others put the pin on late payments and red tape acting as significant obstacles.
Shiona Davies, director of BDRC Continental said external finances may continue to cause obstacles to the growth of small businesses owing to the current state of economy. The data also shows additional measures taken for start-ups, like the National Loan Guarantee Scheme may not be useful to a majority of the existing small businesses.