A third of small businesses turn to the Bank of Mum and Dad

Originally written by Timothy Adler about Small Business

A third of small businesses have turned to the Bank of Mum and Dad to help tackle the Covid crisis.

In the face of an emergency, more small business owners turn to families in front of banks for financial help. According to a Liberis poll, 46 percent turn to family during the crisis, while 40 percent turn to banks.

And over a third (35 percent) said they contacted the Bank of Mum and Dad specifically, while one in five (19 percent) turned to close friends.

> See also: Small businesses selling to the EU face additional administrative costs of £ 180 million

Four out of five small businesses needed financial assistance during Covid – an estimated 4.9 million of the country’s 6 million SMEs – and over three-quarters have applied for commercial funding.

More than a third (37 percent) of small business owners have taken on a second job to keep their business alive, and more than a quarter (28 percent) have considered doing so.

Go without food

Worryingly, 6 percent of SMEs surveyed said they save money on groceries, eat less and occasionally skip meals in order to save money and keep their businesses going.

Cash flow remains the biggest challenge for SMEs. 44 percent said this was a major difficulty.

> See also: Some small business owners have not yet received their Restart Grant

Liberis, the business finance platform, interviewed 500 SME owners for their survey in March.

Rob Straathof, Liberis CEO, said: “There was already a record level of lending to SMEs during the pandemic, with the British Business Bank finding almost half of the external financial assistance requested last year. While government-sponsored programs were a much-needed stopgap measure, many SMBs still turn to family, friends and second jobs to help them get them through. With the end of these programs and the expectation of traditional banks to reduce funding to SMEs, small business owners need more options. “

further reading

Small business owners withdrawing from paying back Covid debt will be banned

A third of small businesses turn to the Bank of Mum and Dad

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