Small business owners are increasingly avoiding taking out loans and overdrafts, according to new research by BDRC Confidential.
The SME Finance Monitor, a yearly survey of 50,000 small and medium sized enterprises (SMEs), found that 78% have neither applied, nor wanted to apply, for a loan or overdraft in the past 12 months. A further 7% said they would have liked to apply for a loan or overdraft but did not for some reason or other.
This is the highest figure to date of businesses not seeking finance. Just 15% of SMEs borrowed money in 2013, compared to 25% in 2012. The report found that 16% had an overdraft, which is the lowest level recorded in the Monitor to date.
Despite a lack of borrowing, fewer business owners have felt the need to put their own money into their business — 38% have injected personal funds into their own business in the past year, down from last year’s figure of 46%.