Close to half of UK small business owners have injected personal cash into their firm to stay afloat as the cost of doing business in Britain remains high and banks continue to keep their wallets shut.
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A new study by business energy comparison site Make It Cheaper and the Centre for Economic and Business Research (CEBR) claims that 47% of small businesses had no choice but to inject additional cash from personal sources this year.
Close to a third of SMB owners had turned to friends and family to make a loan, while a quarter had taken out personal overdrafts, bank loans or credit cards to cover their firm's costs. The average amount raised from these personal channels stood at just over £20,000 per firm, said the study.
The study of 750 firms with 20 employees or less also found that 13% had gone even further than that, taking out a second mortgage on their homes, and a clear majority agreed with the leading statement that the UK was an "unbearably expensive" place to do business.
"The effects of squeezed margins and cost increases are not only threatening businesses but the financial security of their owners and families," said Make It Cheaper managing director Jonathan Elliott.
"Many small businesses feel they have no alternative as costs rise and traditional lines of credit remain cut off," he added.