Small and medium-sized enterprises (SMEs) are continuing to use their personal credit cards to finance their firms, according to a research by UK-based Peer-to-Business (P2B) crowdfunding platform – rebuildingsociety.com.
The research also found that around 37% of SMEs were planning to borrow in the next 12 months using their personal credit cards, as against 12% SMEs, who are planning to use P2P lending.
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Among different personal borrowing methods, personal credit card was the most popular, followed by bank loans.
The study also found that the average amount of personal cash invested by SMEs in 2013 was £22,700.
rebuildingsociety.com managing director, Daniel Rajkumar, said using credit cards to fund businesses is not necessarily a bad idea if owners have plans to repay debts and clearly SME owners are willing to do whatever it takes to ensure their businesses stay on track.
"56% of company owners have used their own money to support their company in the past year. They should consider a business loan instead and protect their personal finances – the regular repayments are easy to manage and all costs are revealed in advance," Rajkumar added.
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