Nearly half of SME owners are using unprotected loans to fund their business, according to research from Old Mutual Wealth.
A poll of 250 small and medium-sized business owners revealed that 48% have unprotected loans or debts, and 60% had used their personal savings to fund their business.
These findings followed the release of a quarterly survey by the Federation of Small Businesses (FSB), which reported low confidence among small businesses at the end of 2017.
In the FSB report, 73% of small businesses reported a rise in costs in Q4 2017, while 41% said their profits had fallen.
Paul Roberts, head of protection at Old Mutual Wealth, said:
“With the rise of the gig economy, more people are becoming self-employed and starting new companies and therefore the role of business protection has never been so important.
“Small business owners in particular should speak to a financial adviser, plan their ‘business will’ carefully and take time to investigate the full range of protection options available to them.”