New data reveals the most popular funding methods for entrepreneurs in 2024

Finances are often a major source of stress for business owners. According to a recent SME insights report by Dojo, a card payment provider, 30% of businesses identify financial stress as their biggest challenge for 2024.

Additionally, 1 in 2 of the businesses surveyed are dealing with overdue and late payments, while only 2% have not implemented or considered implementing any cost-cutting measures.

Businesses frequently require additional capital to fund expansion initiatives and day-to-day operations, in the past month alone, 111,000 Google searches have been made around the world for “business loans”[1]. The need to borrow money doesn’t always signify financial struggle; it can also be a strategic move to support growth.

The study from Dojo surveyed 1,001 business founders and decision-makers to discover where they are sourcing funds to support their businesses and how much money they are borrowing.

SME FOUNDERS BORROWED OVER 74K FOR THEIR BUSINESS

The research from Dojo found that the most common form of borrowing for SMEs is a private loan, something which over a third of founders have done (35%). Inheritance is the third most common source of funds and is most common within the healthcare sector (43%).

More founders went to friends (27%) over family (25%) to borrow money for their business. Male entrepreneurs (29%) are 6% more likely to turn to friends for investment than women (23%).

Government grants are the most utilised in Scotland, where 45% of business owners have accessed this form of funding. According to the survey, they are least utilised in the southwest of England, where just 17% of them are used.

SMEs HAVE BORROWED £87,713 FOR THEIR BUSINESS ON AVERAGE

SMEs WHO TURNOVER £100K A YEAR HAVE BORROWED OVER £33K ON AVERAGE FOR THEIR BUSINESS

For SMEs that turnover £100K, the average amount borrowed for their business was £33,867 with business owners most likely going to their family (33%) or using personal credit cards (33%) to access these funds.

SMEs WHO TURNOVER £50-99.99 MILLION A YEAR HAVE BORROWED OVER £90K ON AVERAGE FOR THEIR BUSINESS

Business owners that turnover £50-99.99 million borrowed over £90,000 for their business, with the most common source of borrowing the funds being a private loan (37%) followed by private investors (36%) and friends (29%).

Which industries have borrowed the most money in 2024?

The data found that on average, businesses borrowed £87,713. Travel & Transport is the industry which has borrowed the most money (£109k), along with Legal who borrowed on average £101k; the only industries to have borrowed over £100k according to the survey.

HR is the industry borrowing the least amount of money to support operations, at £72k.