UK Businesses Using Personal Credit Cards for Financing, Santander Survey Reveals

Personal credit facilities loans have been used by one in eight (13%) senior decision makers at SMEs in the UK for financing their firm over the past 12 months.

• One in eight businesses have used or considered a personal loan
• A quarter of business leaders at SMEs used overdraft facilities as financing
• A third of business are worried about cash flow

Results revealed by Santander Corporate & Commercial’s “SME Access to Finance” study¹

Personal credit facilities such as credit cards and personal loans have been used by one in eight (13%) senior decision makers at SMEs in the UK for financing their firm over the past 12 months, according to new research from Santander Corporate & Commercial.¹

The SME Access to Finance study of 683 senior decision makers at UK businesses also found that one in four (25%) had also relied on overdraft facilities over the past year.

This is especially common in the North East where 26% of SMEs said they had used personal credit facilities as financing for their businesses – more than double the national average.

Santander Corporate & Commercial’s study also found a number of firms – some 8% – also admitted they had never reviewed their finance requirements with a view to financial stability or to assess how much money is required to execute new projects.

Cash flow fears
More than two-fifths (43%) of businesses said they were concerned or very concerned about cash flow over the next 12 months.

The biggest problem, experienced by a quarter (25%) of SMEs, was late and failed payments from customers but, despite this, just 5% said they had used invoice financing in the past 12 months.

Cash flow worries are most prevalent in London, where nearly two fifths (38%) of business managers were either concerned or very concerned about their cash flow in the next 12 months.

Mike Reeves, Joint Managing Director of SME Banking at Santander, said: “It’s worrying to see that many of Britain’s small firms are relying on personal credit facilities to finance their businesses, and are concerned over effectively managing cash flow. If businesses are experiencing problems with late or failed payments, then the simple answer is invoice finance. It’s a tried-and-tested method of unlocking the value of unpaid invoices, providing companies with immediate access to their money.

“SMEs are the lifeblood of the UK economy, helping to create jobs and drive local economic growth. Santander Corporate & Commercial knows that and, as a scale challenger, we bring a unique approach to help all UK businesses achieve their growth ambitions.”

Meeting business needs
Santander Corporate and Commercial has developed a comprehensive range of products and services to help SMEs manage cash flow effectively and secure long-term funding.

The bank’s Breakthrough programme includes its Growth Capital lending programme which offers a highly differentiated service for fast-growth, ambitious businesses.

In addition, Santander Corporate and Commercial’s pioneering referral partnership with peer-to-peer firm Funding Circle is evidence of the bank’s commitment to SMEs whatever their financing and funding needs.

The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.

Notes to editors

Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its 1|2|3 products for retail customers and relationship banking model for UK SMEs. As at 30 June 2015, Santander UK was the most switched to bank, attracting 1 in 4 new retail customers. The bank serves more than 14 million active customers with c. 20,000 employees and operates through 900 branches and 68 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.

About Us
Banco Santander (SAN.MC, STD.N, BNC.LN) is a leading retail and commercial bank, based in Spain, with a meaningful market share in 10 core countries in Europe and the Americas. Santander is the largest bank in the euro zone by market capitalization and among the top 12 banks on a global basis. Founded in 1857, Santander had EUR 1.51 trillion in managed funds, 12,910 branches and 190,000 employees at the close of June 2015. In the first half of 2015, Santander made ordinary attributable profit of EUR 3,426 million, a 24% increase.

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