Friday 8th of October 2010
Individual voluntary arrangement (IVA) questions might be useful for debt-ridden small business owners who are trying to keep their heads above water by making use of credit.
According to new research from More Than, 18 per cent of self-employed company bosses have turned their backs on the banks in favour of alternative financial providers in their time of need.
The study showed ten per cent have asked friends and family to lend them money, while seven per cent have taken out credit cards to help with their cash troubles and a further seven per cent have used personal loans.
And it could be set to get even more difficult for small enterprises to stay afloat in the near future, as 58 per cent of business chiefs fear they'll go under if a double-dip recession occurs.
Questions on IVAs could, however, offer assistance to people who have become crippled by money troubles as a result of personal loans and credit cards that were actually supposed to improve their financial situation.
The measure can whittle away money owed on unsecured financial products over a period of around five years, potentially giving you a fresh start and removing the burden of debt for good.
Commenting on the figures, head of More Than business Mike Bowman, says: "The continued pressure on costs means that [small to medium-sized enterprises'] cash flow is suffering and in a slow-recovering economy, some small business owners may be unable to rely on financial support from banks. As a result, they have to look elsewhere for the cash injection they need to survive."
The statistics follow data from the Money Advice Trust, which shows its Business Debtline has taken calls for help by some 50,000 small businesses since the beginning of the credit crunch.
Some 2,200 were given advice by the organisation in September.
By Ashley Littley
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- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVAs may help those stuck in a vicious cycle of borrowing
