Small businesses turn to self-finance

Date: 19th March 2009

Small businesses have increasingly turned to self-finance since the onset of the credit crunch, a survey has shown.

Research by the website smallbusiness.co.uk revealed that almost a third of smaller companies, including sole traders and partnerships, would rather fund themselves than use bank loans.

What is more, 17 per cent suggest they would borrow funds from their family before resorting to the lending market.

Maggie Andrews, who invented a hand support product called the Wrist Donut, started her business with about £10,000 of her own money.

She told smallbusiness.co.uk: "I was thinking of getting some financial backing to push the company forward, but with all the reports of banks freezing overdrafts the though just terrifies me now."

Ms Andrews added that she preferred to be "in control of the business herself".

The results of a poll published by More Th>n earlier this week showed that one in three workers had aspirations to launch their own business start-up.