The Business Debt Report, based on analysis of over 50,000 UK businesses, also reveals that younger businesses (0–5 years old) are accumulating debt at an accelerating rate, while mid-maturity firms (21–25 years old) hold some of the highest liabilities. In contrast, long-established firms (46–50 years) carry notably less debt, suggesting that business age and resilience are closely linked.
"Debt isn’t always a bad thing" says Swoop Funding CEO.
Andrea Reynolds, CEO of Swoop Funding, believes Birmingham businesses should view debt as a strategic tool for growth if managed correctly.
It isn't inherently bad. In fact, business loans are vital for growth as you are borrowing to invest in your business; the debt you take on when used correctly will repay you multiple times over.
- Your bank is not the only source of funding. Many business owners go to their bank to borrow, but there are many reasons why a bank will say “no” that have nothing to do with whether your business is viable. Through Swoop, you can explore thousands of products that may be suitable for your needs, often with lenders who are more flexible and keen to lend than your existing bank.
- Cash flow is vital to your business. Borrowing may be essential to ensure that you are able to pay invoices, payroll and utilities on time. Look for products such as VAT funding that are built to address a specific need and keep your finances afloat.
- It’s easy to let small loans accumulate over time. Keep on top of what you owe and consider consolidating borrowing. You may be able to include these smaller debts on a commercial mortgage which will mean simpler repayments as well as purchasing a major asset for your business.
- Borrow responsibly. How much you can borrow - and what it will cost you to do so - will depend on your credit score. If you have a low score, you may struggle to find a lender as you will be considered a high risk.
For more information on the report, please visit: swoopfunding.com/uk/business-debt-report/