Business owners risking homes to access finance

Almost one in five small business owners have had to either sell or remortgage their homes to gain the required capital for their business, a new survey has indicated. With many small businesses and SMEs struggling to access cash in the current climate through traditional banking facilities, more and more owners are taking drastic measures to release equity in their homes, office supply company Viking have found in a study of 2,000 business owners. A further 32% have also incurred personal debt, such as loans and credit cards, for the sake of their business. Commercial director at Viking, John O’Keeffe, suggested that the implications of using personal homes to get access to cash were substantial. He continued: “The issue here is with regards to funding – it is inspiring to see that so many entrepreneurs are deciding to start their own business, but it is apparent that there is a lack of money available to support these businesses.”

Alternative business funding?

As bank credit becomes more difficult to access for many small businesses and SMEs, it can seem like there is no option but to risk personal security for the sake of business viability. However, businesses that issue invoices may be able to secure a sustainable long-term funding line through invoice finance, which secures cash through invoices rather than personal security. Invoice finance facilities, such as invoice factoring and invoice discounting, work to release the cash businesses often find is tied up in unpaid invoices, which can take 30, 60 or even 90 days to be settled by debtors. Why not browse our website to find out more about how invoice finance works, or give us a call on 0845 602 9354 today for a chat and a no-obligation quote.