UK small business owners shy away from equity and fear getting into debt
Just two per cent of British small business owners are aiming to secure equity funding, according to new research carried out by Wesleyan Bank.
The study also revealed that owners are more likely to turn to Google than their bank manager for financial advice, while over three-quarters of British small firm leaders admitted that a fear of debt put them off seeking external finance.
Personal savings and bank overdrafts were the preferred financing options of those surveyed with some 55 per cent favouring digging deep into their own pockets.
without external finance, many small business owners are stilting their chances of prospering and fulfilling their ultimate potential. it’s only natural for small businesses to be cautious about making a financial investment, but there’s an equal risk in failing to seek support for growth, said Sean Read, Wesleyan Bank’s sales and marketing director.
the recession may have instilled a non-borrowing? culture into the mindsets of many business leaders, but now were working in a better economy, it’s time for them to broaden their horizons.
In its 2015 small business finance report, the British Business Bank predicted an uptick in the demand for equity finance from small business owners as UK economic growth continues to recover from the recession. Since 2012, the proportion of firm leaders seeking finance to provide working capital has increased, while the number looking for money to invest in new equipment has risen.
Earlier British Business Bank research found that many small business owners were wary of having to give up control over their small business to a third party making them reluctant to seek equity crowdfunding.
Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.
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