Small firm bosses dip into savings accounts

02 February 2010 17:05:42

The majority of bosses of small firms in Scotland have been forced to raid their savings accounts, spend on credit cards or use bank overdrafts in order to survive the recession, a survey has found.

The Federation of Small Businesses (FSB) questioned over 1,000 small business owners in Scotland and found that 38% had dipped into their personal savings accounts over the past 12 months to keep their companies afloat.

More than 31% had used retained profits; 22% had turned to credit cards; and 14% had asked their families for financial assistance.

Andy Willox, Scottish policy convener for the FSB, said that many small businesses had "used up their cash reserves".

"The cupboard marked 'emergency' is bare and, if the issue of bank lending is not resolved urgently, businesses will not have the working capital to take advantage of the recovery," he warned.

When results were combined from across the UK, the FSB found that 41% of small business owners had been forced to rely on their personal savings, while 52% of respondents said that profits had fallen.

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