Moving from Personal Finance to Business Finance

SME research suggests one in four businesses with a turnover of £250,000 or less have in the past used personal finances of owners to grow business, with just 4% opting for a business loan.

Of course, small business owners often speak of the sacrifices made in order to increase the profitability of a business, but with many options (such as business cash advances) for funding available to SMEs, the need to mix personal and professional finances is not necessary.

Per the data, published on, 54% of decision-makers managing turnover between £250,000 and £499,999 had gone without a paycheque for at least one month. Further, just 6% of small businesses opt for professional financial help, with 25% opting to speak to family members instead.

Building a Small Business with Funding

Across the UK there are multiple funding options available to small businesses, each designed to cater to specific needs of a business. As part of any financial offering to businesses, whether it be a standard or alternative to bank loans, there is an element of financial advice involved and planning alongside the business owner looking to borrow money.

In many cases, small business loans, merchant cash advances or alternative business loans will offer a greater structure in money borrowed, with the repayments clearly set out in the terms and conditions, including any fees or interest rate changes.

Borrowing from family members or friends will come without these needs, but also comes within the risk of increasing strain on relationships or tension should repayments take longer than expected.

Business cash advances offer an alternative whereby borrowers pay a set fee and make a repayment on the account on a monthly basis, which is determined by credit and debit card transactions in the previous month. Meaning a slower month, results in a reduced payment, with additional fees, no tension and no going without a paycheque.

Ultimately, this offers peace of mind when building a business on both the personal and professional level.

Speak to an Advisor

Asking a friend or family member for advice can feel easy and comfortable, but the data, objective advice and litigation elements of increasing a business with funding will come through speaking to a trusted financial advisor who can outline clear and obvious hurdles in business plans and growth, which may not be seen with a family member or friend.

Further, a financial advisor is not emotionally tied to a business owner or their business. So any information received is fully impartial and will be based on money and money out of a business, as well as the prospective increases of each based on business lending.

Plan for your personal life

The data above is a common story – people starting businesses will undoubtedly need to put their own cash into them, but once turnover hits a certain level and has been consistently turning over in excess of a quarter of a million pounds each year, the securing of a loan for substantial business growth becomes easier and safer.

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