The latest research suggests that over 50% of small firms in the UK are currently dependent on credit to cover the costs of business insurance.
This research indicates that the level of borrowing among smaller firms to meet these costs is averaging roughly £1,832, and that close to six out of every ten small firms in the UK are in that position. In total, 16% of the firms that participated in the study stated that they are borrowing more than £3,000 every year at the moment to pay for their insurance costs.
The study was conducted by Premium Credit, a finance company, and it points to concerning levels of borrowing among some small firms following the pandemic. It also suggests that getting help from accountants in Goole or wherever they live would be a smart move for many of them.
According to the study, 20% of the small firms that are borrowing to cover the costs of insurance have had to increase their debts to do so during the last 12 months. There is some encouragement though, as 30% stated that they have been able to cut what they are borrowing during that same period.
The biggest source of borrowing is credit cards, which are being used by 44% of the firms. A further 34% have sought credit from insurance providers or private finance companies.
Loans from the government account for the borrowing of 15% of the firms surveyed, while 10% have been able to get the cash from family or friends.