Posted on 27.11.2013, by Rob Warlow
With many businesses continuing to find access to finance challenging owners are turning to a variety of personal sources to either start up or fund growth.
Findings by Experian, the global information services company, show that a quarter of small and medium sized enterprise (SME) directors have used personal finance sources of funding including mortgages, credit cards and savings accounts to support their business.
Experian surveyed a range of SMEs to better understand how they fund business ventures. Of those that had used personal finance, almost a third had used personal mortgages to fund their business while 47% said they have relied on high-interest personal credit cards for everyday business affairs.
Personal bank accounts are also frequently used by SME Directors with two thirds (65%) stating that they have drawn on funds directly from their current account and nearly half (48%) saying that they had dipped into their personal savings.
When asked what they were using the money for:
Whilst many will say that businesses should first be turning to external sources of finance (primarily banks) tapping into personal resources is a cheaper method of finance. The exception to this is of course accessing finance via credit cards and you do need to be aware of a potential impact on your personal credit rating if you go down this route.
As well as being a cheaper source of finance, when it comes to approaching banks for finance the fact you have put in a proportion of the project cost is a plus point.
So just remember, no bank wishes to take all the risk.
I wanted to thank you for such an insightful, energetic, and entertaining talk at the Kevin Green Wealth event on securing funding and creating a successful plan. It was brilliantly executed and a pleasure to listen to and the ideas I’ve learned are definitely going to help me in going forward.
Rob delivered a series of 3 workshops aimed at understanding how finance houses look at finance propositions with the aim for us as a team to deliver more of a bespoke offering to our customer base. The training was delivered to a mixture of staff who work with new businesses start-ups and existing established businesses across Mid & South West Wales. Rob delivered the training with an abundance of passion and has really helped my team look at financial propositions in a different light, many thanks again Rob and I look forward to work with you in the near future.
Hi Rob, it was so interesting and entertaining listening to you at the Kevin Green Wealth Coach Workshop in Reading this weekend! I didnt realise you can find Finance proposals such fun!. Brilliant tips! Thanks.
Rob kindly agreed to attend the recent Pontypridd RFC sponsors networking evening and delivered what can only be described as an excellent talk on 5 Tactics to Boost Your Business and Your Profits. He kept the audience engaged throughout and the feedback from everyone was excellent. Rob is very knowledgeable on business and finance and on top of that is a genuine nice guy. We hope to have him back at a future event and I have no hesitation in recommending Rob’s services.
Further to your recent presentation at LEAD Wales just wanted to say it was very refreshing to see somebody talk passionately and positively about finance, very insightful!