£94,000 start-up capital needed for new businesses
New business owners require £94,000 in start-up capital on average to set up their business, according to new research.
The survey from personal asset lender Borro found over a third (38%) of Small and Medium Enterprises (SMEs) have had to invest additional personal funds from their own savings.
The impact of the double-dip recession along with rising start up costs could cause concern for those thinking of setting up a new salon without the financial capital in place.
The findings also revealed that businesses have needed to take out short-term loans in the last 12 months to help with business cash flow. This has impacted the start-up cost increasing it to £127,992.
Worryingly, 42% of businesses have needed additional bank loans following a loan to help cover start-up costs and some 46% of small business owners have considered selling their business or closing down.
Borro chief executive officer Paul Aitken, said, “The UK’s slump into a double-dip recession has not only affected how small business owners perceive starting a new company but our research has also found how many SMEs have had to either take out a loan or dip into their savings only to see that their shareholding has been diluted.”