One third of small businesses have turned to the Bank of Mum and Dad to help them get through the Covid crisis.
Faced with an emergency, more small business owners to turn to family ahead of banks for financial help. Forty-six per cent turn to family during the crisis compared to 40 per cent who turn to banks, according to a Liberis survey.
And over a third (35 per cent) said they turn to the Bank of Mum and Dad specifically, while one in five (19 per cent) said they turned to close friends.
Four out of five small businesses have needed financial support during Covid – an estimated 4.9m of the country’s 6m SMEs — and over three quarters have sought commercial financing.
More than a third (37 per cent) of small business owners have taken on a second job to keep their businesses afloat, and more than a quarter (28 per cent) have considered doing this.
Going without food
Alarmingly, 6 per cent of SMEs surveyed said they were saving money on food, eating less and, occasionally, skipping meals to try and save money and keep their businesses afloat.
Cash flow remains the biggest challenge for SMEs, with 44 per cent saying this was a major difficulty ahead.
Liberis, the business finance platform, surveyed 500 SME owners in March for its survey.
Rob Straathof, CEO of Liberis, said: “There has already been record levels of lending to SMEs during the pandemic, with the British Business Bank finding almost half of the applied-for external financial support last year. While government-backed programmes provided a much-needed stopgap, many SMEs are still turning to family, friends and second jobs to get them through. With these schemes coming to an end and traditional banks expected to reduce SME financing, small business owners need more options.”