SME cash flow affected by credit crunch crisis
SMALL business owners and social entrepreneurs are now finding it harder to secure finance as a result of the global credit crunch crisis.
Research by UnLtdWorld.com – one of the UK’s growing number of social entrepreneur networking websites – found that around 40% of small business owners and social entrepreneurs experienced cash flow problems in the last few months as a result of the worsening economic situation.
Along with facing day to day cash flow difficulties, it would appear that small business owners are finding it harder to secure finance with 68% of those business owners who had recently applied for a business loan or credit card being turned down.
More than 20% said that their business had been badly affected by the recent financial problems in the UK such as a training, research and consultancy company who has faced difficulties in its industry due to a reduction in buyers’ budgets.
Enterprise in the UK could also be affected by the recent tightening up of lending criteria by banks and building societies given that many entrepreneurs and small business owners use personal credit cards and loans to get their company off the ground.
The research found that 34% of the business owners who replied said they themselves had used personal loans and credit cards to fund their growth and start up costs.
Alberto Nardelli, chief strategist for UnLtdWorld said:
“We wanted to get a better understanding of the real financial position faced by many small business owners and social entrepreneurs. To some extent, the outlook seems quite bleak for now.
“We had noticed an increase in discussions relating to financial difficulties across our social networking site and the research has presented us with a really clear picture of the extent of the issues.”
More than 100 business took part in UnLtdWorld.com’s research. The website is part of UnLtd foundation, which boasts thousands of members from around the world.
