Small business owners are increasingly willing to try new funding options, according to a new survey.

The September 2021 edition of ScotPac’s SME Growth Index, reports that 66.1 per cent of SMEs introduced new funding options over the past year.

Six months ago, only 46 per cent of SMEs said they used new funding options.

More than half (55.4 per cent) of the businesses that introduced new funding used the owner’s funds; 42.5 per cent used a personal credit card; 38 per cent applied for asset and equipment finance; 27.6 per cent relied on some form of government stimulus; 20 per cent took out a new overdraft; and 16.3 per cent sourced new invoice finance.

Only 8.8 per cent borrowed from an “online fintech”.

Scotpac said use of invoice finance has increased from 7.6 per cent in 2018.

Researcher East & Partners, which conducted the survey for Scotpac, said the fact that close to half of small businesses are relying on the owner’s personal credit card as a new source of funding is a sign of potential trouble.

Among businesses that did not use new funding options, 23.8 per cent said their applications were rejected and 23.5 per cent said they were partially rejected, while 28.5 per cent said excessive documentation requirements put them off.

A further 28 per cent said they were reluctant to increase liabilities.