One million start-ups rejected by banks » SMEInsider

One million start-ups rejected by banks

More than one million sole traders have had finance applications rejected and a third have been turned down for bank loans, research has shown.

Some 40 per cent of 500 business owners surveyed by Amigo Loans said they resorted to asking family for money, and 30 per cent turned to friends.

And, despite record high fees, 42 per cent eat into their overdraft in order to fund their new business.

 

Rejection puts off many

More than one in 20 that had been refused a bank loan were put off and did not go elsewhere for finance. As a result, a potential 73,000 start-ups did not get off the ground because they couldn’t get funding.

CEO of Amigo Loans, Glen Crawford, said: “It’s a disgrace that the people who keep our society operating, the mobile hairdressers, the wedding photographers, cleaners, cafe owners, mechanics, driving instructors and a whole host of other ambitious sole traders are being alienated by banks – the bankers have forgotten why they exist.”

The research coincides with the publication of a government-commissioned independent review of self-employment, in which its author, Julie Deane, called for flexible finance to be made more readily accessible for self-employed people.