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LONDON, AUGUST 2006 - A survey released today by Simply Business, the UK's first comparative and purchasing facility for Business Finance & Insurance, has revealed that only one in twenty-five entrepreneurs turn to Government-assisted financing schemes to get their businesses off the ground, preferring instead to ask 'friends & family' for the start-up capital they need.
Simply Business surveyed 300 of its Small Business customers and asked them what means of finance they choose when looking to get their businesses off the ground. The majority of business owners indicated that they chose to use their personal savings to start their business, bank loans (the second most popular option) and friends and family (third) as the preferred means of start-up finance. Government-assisted financing, through the Small Firms Loan Guarantee scheme, was the least popular means of financing by quite a margin, with only one in twenty-five choosing to use it to fund their new venture.
Worse still for the Government, of those surveyed those that used the Small Firms Loan Guarantee scheme had the lowest opinion of the support offered by the Government. All without exception believed the Government should provide a better financial support structure for start-up businesses. While ninety six per cent of all those surveyed believed that the Government could provide a better structure for financial support than currently exists.
"These results demonstrate that most UK start-ups do not have sufficient access to government finance and those that do don't appear to rate it very highly" commented Brad Liebmann, managing director, Simply Business.
"This is a sad indictment for a country aspiring to be the world leader for encouraging enterprise development," Liebmann continued. "By comparison, the loans scheme used by the Small Business Administration in the US provides far greater access for start-ups to government-assisted finance. This has helped the US develop a rate of entrepreneurship that is almost twice that of the UK."
The results of the survey will come as a blow to the Government's attempts to increase access to finance through its Small Business Service (SBS). The Department of Trade and Industry established the Small Business Service with the following vision:
- Making the UK the place in the world to start and grow a business
- Build an enterprise society in which businesses of all sizes thrive and achieve their full potential by Increasing the number of people considering going into business
- Improving the overall productivity of small firms and encouraging more enterprise in disadvantaged communities
- Simply Business is the UK's leading online comparative and purchasing facility for business finance and insurance
- Simply Business has been in operation since 2000. It grew out of Xbridge's Decision Finance business portal
- Xbridge is the UK's leading B2B online financial services company offering consulting, build and integration services to many of the UK best known financial brands
- Xbridge Ltd is authorised and regulated by the FSA
Xbridge's company registration number: 03967717; Consumer Credit Act license number: 511743; Entered on the Financial Services Authority's register number 313348.
For further Information contact:
Julian Budd
Communications Manager
Tel No. 0207 9208076
One Finsbury Square
London
EC2A 1AE
www.simplybusiness.co.uk