Individual voluntary arrangements (IVAs) could offer breathing space to company bosses who are currently making use of credit cards and personal loans…
Individual voluntary arrangements (IVAs) could offer breathing space to company bosses who are currently making use of credit cards and personal loans to keep their businesses afloat.
According to figures from More Than, 58 per cent of small enterprise owners are concerned they will go bust if there is a double-dip recession – something that has been predicted by numerous economic experts.
In addition, money troubles felt by company chiefs have caused ten per cent to turn to their family friends – instead of banks – for funding, with seven per cent relying on credit cards and a further seven per cent using loans.
And it is firms in the north-west of England that appear to have the most serious money troubles, due to the economic downturn and rising costs, which have gone up by six per cent over the last 12 months.
IVAs could, however, make a big difference to the lives of cash-strapped business owners, by cutting the money they owe on unsecured financial products – if it is worth more than £15,000 – with the help of a series of monthly repayments.
And it could be the measure completely removes the debt burden from their shoulders, potentially gving them more control over their finances and rosier prospects for their enterprise.
Commenting on the findings, Mike Bowman, Head of More Than Business, said: “The continued pressure on costs means that [small to medium-sized enterprises’] cash flow is suffering and in a slow-recovering economy, some small business owners may be unable to rely on financial support from banks. As a result, they have to look elsewhere for the cash injection they need to survive.”
He added company owners are currently trying to cut costs by reducing their travel to long distance jobs and meetings, something that may have an adverse effect on the “bottom lines” of the business.
By Amy White