SMEs turn to risky funding
Jun 18 2010
Credit restrictions are causing SMEs to turn to risky forms of finance.
Some 35 per cent of small firms say they have used credit cards to fund their business over the last six months, with 23 per cent using loans from friends and family, according to research from finance broker Hilton-Baird
Financial Solutions. Evette Orams, managing director at Hilton-Baird Financial Solutions, says: ‘It’s inevitable that when faced with strained cash flow, SMEs will seek alternative methods of gaining access to funds. But they would do well to steer clear of short term, costly and inflexible methods, such as credit cards, which could offer more long term risk than reward.’
The latest figures from the British Bankers' Association (BBA) show that new lending to small firms across the UK banking industry totalled £529 million in April, down from £678 million in March, but more than February's £525 million.
There are currently no comments on this article
Comments