UK SMEs rely on personal savings to support themselves

Report shows quarter of small and medium-sized businesses used own funds and handouts to support themselves

Spending chiefs have urged the creation of a new £200m fund to help SMEs
A quarter of small and medium-sized firms are supporting their businesses with personal savings

A quarter of small and medium-sized firms are supporting their businesses with personal savings and handouts from family and friends, a report has claimed.

Business funding specialist Bibby Financial Services, which commissioned the research, said the reliance on personal finance prevented firms from being able to take advantage of the first stage of economic recovery.

The survey revealed that almost half of small and medium-sized enterprises (SMEs) used just one source of funding, with 20% of firms saying they relied on a bank overdraft and the same amount again using a bank loan.

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