Research shows small businesses struggle to access finance
At a glance
- Personal savings are the number one source of funds for 38% of Kiwi small businesses, jumping to 64% for those less than two-years old
- Mixing of finance may impact more than two in five (44%) small businesses that require more funds to achieve their business goals
- The advice from financial experts may be key, with more than one in five small businesses choosing advisers as one of the most valuable support for their business
Personal and business finance is becoming increasingly blurred for small business owners, which may lead to difficulty accessing business finance as the lending criteria tightens.
Latest findings from a survey, commissioned by small business lending specialist Prospa, reveals that when a business needs money almost two in five (38%) business owners will dip into their personal savings to support their business operations. It is a very common trend among businesses less than two-years old, with 64% of those surveyed stating that personal savings is their primary source of funding.
“This study demonstrates areas of opportunity for advisers to support their small business clients,” says Prospa Managing Director, Adrienne Begbie.
“Advisers will be well aware of the unintended consequences of mixing personal and business finance, with it even more important now, as the introduction of the Credit Contract and Consumer Finance (CCCFA) regulations heavily impacting consumers. Advisers can provide valuable advice in separating the two, and work with business owners to establish best practices around managing these finances.”
With 44% of small businesses requiring additional funds to achieve business goals and the figure jumping to 66% for younger businesses less than two-years old, which presents a great opportunity for advisers.
The survey also found that one in five (22%) Kiwi small businesses chose advisers as one of the most valuable sources for external support and are a great resource to help safeguard business owners from possible risks or provide advice that will help businesses access funds.
“As trusted sources, advisers are in a position to help small businesses with these challenges. Especially among owners with less experience, advisers can play a key role in supporting and better educating them – not only on policy and regulation changes, but of the wider ecosystem of funding options available to their small business, so they can achieve their goals and priorities for the year ahead,” concludes Begbie.
Media Contact:
Marina Ohtsuka, One Plus One Group
[email protected]
+64 21 257 2666
This survey was conducted online by One Picture between 27th January – 10th February 2022 amongst a sample of 525 small business owners in New Zealand with 1 to 50 employees.
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