Entrepreneurs Remain Unaware Of Business Debts

Fri, 01 Feb 2008

Entrepreneurs are ignorant about the amount of money their business owes, a new report has revealed.

The research, carried out by entrepreneur think-tank the Tenon Forum, found that 49 per cent of UK business owners said their company currently owes money, with roughly 40 per cent taking out loans to grow the business .

"In the current fragile economic climate, it’s especially important that entrepreneurs know their balance sheet inside out," commented Carl Jackson, head of Tenon Recovery.

"Borrowing can bring considerable business benefits but debts must be kept under control and within the financial limits of the company ."

He added: No matter their level of debt, entrepreneurs should put contingency plans in place to ensure these debts remain manageable (and the company solvent) if the economy takes a nosedive."

However, the poll found that entrepreneurs are relatively comfortable with their level of business debt, with a quarter stating they were open minded over borrowing funds and 15 per cent willing to accept a high level of borrowing in return for long-term growth.

In addition, the research also found that 28 per cent of entrepreneurs have moderate or high levels of personal debt, although a quarter said business borrowing had made them more cautious of personal borrowing .
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