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15% of SMEs use personal savings to keep business afloat. How do they protect this money?

15% of SMEs use personal savings to keep business afloat. How do they protect this money?

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The One in seven business SMEs use personal savings to keep business afloat

The coronavirus pandemic is causing SME owners across the country to take drastic action in order to ensure their business survives. According to research by Nucleus Commercial Finance, one in seven (14%) are using personal savings for immediate financial support despite the options available from alternative lenders.

Only a quarter (25%) of SMEs have avoided taking the option of using personal savings as they already had enough cash in the bank to survive the crisis. This demonstrates the vulnerability of UK’s SMEs when it comes to having the finances in place they need to secure their long term viability and to protect themselves from any future crises.

Two fifths (44%) of SMEs said they have been negatively impacted by coronavirus and the subsequent lockdown – they have either applied for or considered seeking additional financial support. Of this group:

13% have extended an existing loan/finance facility

12% have already taken out a new loan/finance facility

11% are considering applying for a loan/new finance facility

7% have applied for a loan/new finance facility

Chirag Shah, CEO, Nucleus Commercial Finance, said: “As the economic impact of the pandemic becomes clearer, it is alarming that SME owners continue to use personal savings to support their business. While some owners might believe that this is the best option for short-term cash flow needs, taking this measure can have a detrimental effect on the business and also their personal situation, especially if activity does not improve immediately once lockdown measures are eased.”

“Entrepreneurs should know and be reassured that there are flexible finance options available; we have already approved more than £100m in funding to SMEs since the coronavirus outbreak, providing both short and long-term facilities to ensure they have the financial support to get through this challenging time.”

Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…

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Credi the #1 lending management platform for friends family & their business

Formalise and manage your loan agreements online with Credi. Trusted by over 7,000 people worldwide. Takes minutes to set up

Use Credi for FREE – for all loans up to  A$5000, $5000 / €5000,  £5000 . Loans over cost A$20, $20, €20,  £20  or other other local currency amounts (sales tax may apply).

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