Entrepreneurs require £94,000 in start-up capital on average to get their business going, research finds.

Entrepreneurs require £94,000 in start-up capital on average to get their business going, research finds. 

Furthermore, over a third (38 per cent) have had to invest additional personal funds from their own savings into the business, according to a poll by personal asset lender Borro. 

Not only have SMEs had to dip into their personal savings, one in ten have taken out short-term loans in the last 12 months in order to assist with business cash flow. 

Those businesses that have needed to take out a loan to start their businesses have had a higher average start-up cost of £127,992 of which they have borrowed £84,500 – 66 per cent of this total start-up cost.

Among the businesses that used a loan to help cover part of their start-up costs, 42 per cent have had to take on additional bank loans after the business was launched. 

Some 46 per cent of all small business owners have seriously considered either selling their business or closing it down completely.

Borro CEO Paul Aitken says, ‘The UK’s slump into a double-dip recession has not only affected how small business owners perceive starting a new company but our research has also found how many SMEs have had to either take out a loan or dip into their savings only to see that their shareholding has been diluted. 

‘It is a real worry to see that the future outlook and struggle that SME’s are going through is so grim.  For those that take the time and effort to start up a business it is only fair that they are rewarded.’

Research further reveals that almost a quarter (22 per cent) of business owners have seen their shareholding diluted as a result of taking on new investors or selling a share in their business.  

See also: Starting a franchise