Partner Article

Personal loans not answer to SME problems, says debt expert

A debt solutions company is warning small businesses against using personal loans and credit to support their companies if they are unable to secure lending support from banks.

This week the Q2 Insolvency Figures are due for release, and expected to confirm the financial pressures many SMEs are currently facing. Atlantic Financial Management, have already seen increasing numbers of company directors in problems, owing in part to many using personal credit cards to support their business.

However, these results are unsurprising as it is still difficult for small businesses to secure credit and many still find it difficult to access loans and credit.

Kevin Still, Atlantic Director said: “We find that in most debt cases involving business owners and company directors, personal credit cards have been used to fund the business creating a spiral of debt, with one credit card being used to pay off another often with interest charges rising each month.

“This can have long term consequences for the individuals concerned and could seriously limit their access to financial products and services.”

Kevin recommends that businesses facing difficulties should address the situation quickly to get it back under control.

He added: “Accredited debt solutions providers can offer specialist expertise to small business owners to help them get back in the black, with access to business recovery specialists with access to business recovery specialists should this also be a requirement of a holistic debt solution.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .