Growth prospects a pipe dream for a fifth of micro-business
Press Release - 13 July 2013
- A quarter of micro businesses need additional funds to grow their business
- 18% of micro businesses will borrow from friends/ family in a bid to grow
At a time when business start-ups are struggling to get off the ground, new research from Amigo Loans, the guarantor lender, reveals that even after getting past the start-up hurdle, micro businesses aren’t confident about their growth prospects.
A quarter (25%) of micro businesses think they’ll need additional funds in order to grow their business and a further 22% believe they need to take on more staff to help the business mature. In a bid to expand, 18% of micro businesses will borrow from friends/ family.
A worrying fifth (21%) of micro-businesses don’t have any idea how they will grow in the future and a further 15% think growth just isn’t possible for them at the present time. With one in six forced to take out a payday loan to fund their business venture, growth prospects are looking bleak.
Micro businesses are trusting their instincts however, with a third (33%) saying their own business acumen helped them grow within the first year of existence. For a quarter (23%) it was setting up at the right time and meeting customer demand. A further 11% got by with a little help from their friend, saying having a good business partner helped them grow.
James Benamor, founder and CEO of Amigo Loans comments:
We talk a lot about start-ups and how we can help businesses get off their feet but growth of a business is what keeps it afloat, what brings about new prospects and helps owners feel secure about the future. We see many micro-businesses come to us who are looking for extra funds to help their business move to the next level, whether this is for a new piece of equipment, some vital training or hiring staff. Growth can only happen when small businesses aren’t crippled by the clutches of payday loans and their extortionate APRs. We want all small businesses to shop around before resorting to payday - there are better funding options available, through credit unions, guarantor or peer to peer lending.
Amigo Loans gives micro-business owners a real chance to build their business, getting extra funds they need, rather than be turned down by a computerised credit scoring system that doesn’t take into account a business’s ambition and drive. Amigo’s old-fashioned approach means start-ups are being given the chance of growth they deserve. Lending is based on trust, personal endorsement and one-to-one interviews offering loans using friends and family as guarantors. An Amigo loan gives borrowers the opportunity to build or rebuild their credit score, as opposed to destroying it through the use of payday loans.
Amigo Loans calculate interest daily on guarantor loans for the self-employed, charge no fees for early or late repayment and can work out thousands of pounds cheaper than regularly using payday lenders.