With a stable flow of finances being the lifeblood of your business, picking the right business bank account for your specific needs is very important. We’ve collected some facts about how businesses in the UK support themselves.
The business finance market
With 86% of SMEs (small and medium-sized enterprises) founded in the last two years establishing their businesses using personal savings, the majority of startups are funded by their founder. However, the unstable growth period that most businesses face often necessitates unseen costs, which is where business financing may become pivotal to their success. With 60% of UK private sector employees working for an SME in 2018, the financial status of these SMEs has the potential to impact approximately 16.3 million employees.
What methods did SMEs use for funding in 2018 compared to 2017?
Credit card finance is consistently the most popular choice for businesses in need of extra funds, being used by 30% and 36% of SMEs in 2017 and 2018, respectively. The next two most popular choices are a bank overdraft and leasing/hire purchase. The most significant change is a 6% increase for credit card financing from 2017 to 2018. A number of businesses surveyed over the two years reported using more than one type of method.
The number of finance providers contacted by SMEs in 2018
82% of businesses received all the finance that they requested in 2018 from their first provider.
49% of businesses reported that the main reason for only contacting one provider was because they had an established relationship with that provider.
18% of SMEs sought external advice when applying for finance, with a general trend suggesting that larger businesses are more likely to seek advice.
Charlie Barton is a publisher at Finder. He specialises in banking and investments products, including banking apps, current accounts, share-dealing platforms and stocks and shares ISAs. Charlie has a first-class degree from the London School of Economics, and in his spare time enjoys long walks on the beach.
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