A recent report conducted by GMTV’s money saving expert Martin Lewis, found that the number of people drawing from their credit cards to make mortgage re-payments has increased by almost 33%. Similarly, as the majority of landlords have refused to contemplate reducing quarterly tenancy agreements many small business owners are looking to access some form of finance as they begin the New Year.
However, as a consequence of the recession, the number of small business loans available has reduced dramatically and this has lead to small businesses asking their banks for an overdraft extension.
According to a report conducted by Enterprising Finance, over 38% of all small businesses have applied for an overdraft extension since the recession began, while only 20% have submitted a business loan application.
Scott Hills, founder of Enterprising Finance, comments; “Many small business owners perceive business loan charges to be largely inflated, compared to the cost of increasing an overdraft they have with their existing business banking provider. However, as a result of rising interest rates this is no longer true. Business owners should investigate all finance options before committing to an increased overdraft.”