Many people dream of starting their own small businesses. Yet entrepreneurs often run into difficulty when finding the means to fund their startups. Small business loans are a popular method to financing, but according to new research, small business owners are increasingly turning to their own savings – a potentially dangerous trend.
According to a survey by LegalZoom and the Ewing Marion Kauffman Foundation, 80 percent of entrepreneurs said they used their personal finances for business funding reasons. Just 20 percent of those polled said they secured money through family members, banks, or home equity loans – a risky move according to some.
“With 80 percent of early-stage business owners using personal funds to finance their companies, founders are decidedly willing to take on risk,” said John Suh, CEO of LegalZoom. “However, these business owners need additional financing if they are to succeed in helping drive our economy forward. Of the 60 percent of respondents who said they faced business difficulties, 45 percent cite lack of access to credit.”
Small business owners need financial help from entities outside of themselves to grow their businesses. In order to do so, entrepreneurs can look to National Funding as an established source for a small business loan that can help bring their operations to the next level.