Britain’s small businesses have had to draw on more than £2.8bn of savings over the past six months, to compensate for the dearth of available bank loans.
That is the principal conclusion of a new survey from bank and asset management firm Investec, which found that the average small company has drawn over £91,000 from its reserves since January.
In total, 15% of companies turning over £1m or more have resorted to savings this year, according to the Investec study.
Linda McBain, of Investec, told The Scotsman that many small firms are struggling to secure capital, and that the low interest rates on business deposits are leaving entrepreneurs with “little incentive to keep money in accounts.”
The Investec results come just a fortnight after a similar study, published by business finance specialist Bibby Financial Services, which showed that 16% of small to medium-sized firms drew on personal savings or money from family and friends, over the preceding 12 months.
At around the same time, the Bank of England released figures showing that lending to private, non-financial firms contracted by £4.9bn in May.