The FSB also claimed that personal guarantees, which make borrowers personally liable for business loans, are being used excessively and stifling growth, dampening entrepreneurs’ willingness to take risks.
David Raw, managing director of commercial finance at UK Finance said: “The banking and finance industry supports millions of SMEs and entrepreneurs across the country.
Lenders could also be encouraged to consider offering lower mortgage rates to self-employed people who have taken out income protection insurance, the FSB said.
Tina McKenzie, FSB’s policy chairwoman, said: “By solving the finance conundrum too many entrepreneurs find themselves in, we can help to unlock the growth we need to get the economy on track.”.
Entrepreneurs are also relying on various finance options to grow or stay afloat, including bank overdrafts (17%), credit cards (16%), and financial support from family and friends (9%), the report found.
