Businesses turn to credit cards for funding

Entrepreneurs look to use credit cards for business funding in difficult times for securing capital.

According to a study by Investec Specialist Private Bank, one in five (19 per cent) intend to turn to credit cards to help finance their businesses.

Respondents are glum about access to funding, with 51 per cent saying monies will be ‘quite hard’ to secure over the next 12 months, while 13 per cent say it will be ‘very hard’.

One in ten will look to sell assets in order to raise capital, 6 per cent expect to secure equity from friends, family or associates and nearly one in four (23 per cent) intend to lease assets in order to raise funds.

Mezzanine finance, a hybrid of debt and equity financing, is set to be used by 20 per cent of respondents, with a further 26 per cent planning to raise funds through invoice discounting or asset based lending.

See also: The funding options for high risk businesses

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