According to recent research carried out by the SME advice service, Business Debtline, small business owners and those self-employed are experiencing high levels of debt. There is an increasing concern for this, as these people make up 15% of the country’s total employed population and the tendency for more and more workers to become self-employed is leaving thousands of people in debt.
In the report, there were various issues highlighted which included: low and variable incomes, late payments and lack of business management skills. These topics are well known as some of the key financial sticking points for SME’s.
“Self-employment and small business ownership continues to grow and play a crucial role in driving forward our economy,” said Joanna Elson, chief executive of the Money Advice Trust.
“While many of these businesses are able to flourish, a growing number are struggling with high levels of debt, putting both their business and personal finances at risk.”
The Money Advice Trust has issued several recommendations for government and creditors in response to the challenges being faced, which include calls for:
- Creditors to extend their work on supporting customers who are in vulnerable circumstances to their small business customers.
- More powers for the Small Business Commissioner, including the power to fine any persistent late payers and an expended remit to cover the public sector.
- The government’s new Single Financial Guidance Body to ensure that self-employed people are well served across its debt advice, money guidance and pension.
Please don’t hesitate in contacting one of the partners at Poppleton and Appleby who will be more than happy to discuss with you your business plan. If necessary, we can arrange to carry out a financial review and if appropriate, provide cash-flow forecasts in order to highlight any future peaks and troughs in trading, The availability of good quality and relevant financial information will instil confidence in existing or potential lenders who are more likely to provide essential backing or exercise discretion in your favour.