UK business owners are using personal loans and their own personal funds to shore up their business amid the cost of living crisis.
New research from Evelyn Partners found that a rising number of small- and medium-sized enterprise (SME) owners are re-mortgaging or selling their home, taking out a personal loan, reducing their own salary or benefits and investing their personal savings in their business.
20 per cent of SME owners have already taken out a personal loan, while 43 per cent are currently considering doing this.
Meanwhile, 22 per cent of business owners told Evelyn Partners that they are not confident that their business will survive the upcoming recession.
“As the UK enters a challenging economic period, it’s worrying to see business owners blurring the lines by dipping into their own personal wealth to protect their business,” said Claire Burden, partner, advisory consulting, at Evelyn Partners.
“Owning and running a business can be deeply personal, and while it’s honourable that business owners are looking to make personal sacrifices to protect their business and employees, we would only recommend dipping into personal wealth to bolster a business as a means of last resort.
“Instead, we would encourage business owners to seek professional advice from an adviser specialising in business turnaround at the earliest possible opportunity to identify alternative means through which they can shore up their business.”
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