According to recent research, 47 percent of UK small business owners have injected personal cash in the company to keep it running, with 13 percent having to remortgage their family homes. The average amount of personal cash used to bale out their business is £20,400, and 27 percent of small company owners have borrowed from friends and family.
A quarter have used personal credit cards to pay for business overheads, and 22 percent have taken out a personal bank loan.
The research was carried out by the Centre for Economic and Business Research and Make It Cheaper, a business services and utility price comparison website. The researchers surveyed 750 owner managers of UK businesses with twenty or fewer employees.
The survey found that 89 percent of small business owners think the UK is an ‘unbearably expensive’ place to run a business. Some sectors see owners injecting significantly higher levels of personal funds into their businesses; in dental and medical surgeries the average amount of borrowed funds is £120,000.
Jonathan Elliott, managing director of Make It Cheaper, said: “The effects of squeezed margins and cost increases are not only threatening businesses, but the financial security of their owners and families.”
Make It Cheaper claims the costs which will put the most pressure on small businesses this year are transport (expected to rise by 20.5 percent), energy (expected to rise by 8.5 percent) and insurance premiums (expected to rise by 4.1 percent).
For more information on managing small business costs, visit: www.businessfit.makeitcheaper.com/family-silver