The survey of sole traders revealed that more than one in 20 of those that had been refused a traditional loan did not seek funding elsewhere, meaning a potential 73,000 businesses never came to fruition because they couldn’t access finance.
Forty per cent of the business owners surveyed said they had turned to family for financial support while 30 per cent had secured investment from friends. Another two fifths of respondents admitted using their overdraft for start-up finance, despite overdraft fees hitting record highs.
Rather alarmingly, a quarter of sole traders that had been refused a loan claimed they would have stood a better chance of securing funding from a stranger on the street.
Glen Crawford, CEO of Amigo Loans, who commissioned the research, commented: “It’s a disgrace that the people who keep our society operating, the mobile hairdressers, the wedding photographers, cleaners, cafe owners, mechanics, driving instructors and a whole host of other ambitious sole traders are being alienated by banks – the bankers have forgotten why they exist.”
