Many SMEs use home loans to fund businesses
Article by Mozo
A worrying number of business banking customers are using their home loans to keep their companies afloat.
New figures released by corporate solutions provider MYOB have shown that 28 per cent of small and medium-sized enterprises (SMEs) use money from their own mortgages to fund their firm.
This means that people in this position are doubly affected by any fluctuations in national interest rates – as it impacts their business and home life.
The study showed that the practice is more common in certain parts of Australia than others.
Indeed, entrepreneurs in Western Australia are least likely to use their home loan to pour money into their organisation, while the process is most commonly used in Queensland.
Chief executive officer at MYOB Tim Reed said that it is a particularly tough time to be running an SME down under.
"Business conditions are still sluggish and one quarter of SMEs expect their revenue to drop between March this year and March 2013," he remarked.
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