Despite the U.K. having one of the most robust startup ecosystems in Europe, not all is well in the country. Post-covid inflation fears and the sluggish growth of the economy are blowing the froth off the country's enterprise culture. In desperate attempts to prevent their businesses from going into liquidation, an ever-increasing number of young entrepreneurs under the age of 35 are using their own money to run the business as cost of the living starts taking a toll.
Reeling under the increasing economic pressure and fear of inflation, almost three-quarters of entrepreneurs have dipped into their personal savings in the last month to save their business from going under. Alarmingly, 74 per cent of entrepreneurs said they have had to rely on personal finance to keep their business afloat. This was revealed in another recent research by the Parliament Street think tank.
Of this figure, 31 per cent said they had to dip into their personal savings on more than one occasion in a desperate attempt to prevent their business from going into liquidation.
Even when entrepreneurs do know where to go for business finance, a whopping 80 per cent of them don’t feel they have the time for such a laborious, admin-heavy process, especially during the launch of their business and during their first year of trading. The issue is elevated by over two thirds (68 per cent) of entrepreneurs being unsure who to ask for business finance advice, with young entrepreneurs in particular in need of guidance, with 74 per cent unsure.
Earlier this month, the Federation of Small Businesses (FSB) in the U.K. had revealed lending to small businesses had hit an all-time low.