Entrepreneurship in the UK could be affected by the recent credit crunch, it has been claimed. According to Richard Litchfield, managing director of small business support service Eastside Consulting, a lack of credit and the high cost of borrowing may result in fewer people taking the gamble of setting up a business of their own.
He believes that the impact of the credit crunch on enterprise will be largely determined by its effect on the mortgage market, suggesting as he does that entrepreneurs are often reliant on their homes to finance their ventures.
"The issue comes back to what affect the credit crunch has on the wider economy," Mr Litchfield confirmed.
"If we find that a much higher number of people are defaulting on mortgages and losing their jobs, then you'll find that that this will feed into the enterprise marketplace. Less people will be in a position to take the entrepreneurial risk.
"In a sense, the indirect asset base of the SME marketplace is the houses of the business owners, because they're often used as security. And just on a psychological level, if people have more equity in their house they're more likely to be willing to take an entrepreneurial risk."
However, Mr Litchfield emphasised that the most common way to finance an entrepreneurial venture remains the support of friends and family - as well as drawing on the help of those more easily led.
"[The] first place to go is FFF: that's friends, family and fools... If people have either savings, or family and friends with a bit of capital that will back them, then that's 100 per cent the most common way to start any business," he said.
In addition to this, there are a number of other opportunities - and further small business advice given by the expert includes the notion that the most obvious course of action is often the most sensible.
"Beyond that there is a wide range of different sources of finance, and different agencies to assist people raise the finance. Loan finance is perhaps the most obvious, and people should start by visiting their local bank," he commented.
Another tip for entrepreneurs looking for finance given by Mr Litchfield is to attempt to secure money from high net worth individuals - otherwise known as business angels.
This could be achieved by pitching ideas to wealthy individuals, local to the entrepreneurs who operate in the same sector. Regional Development Agencies were also suggested as good starting points.
Disclaimer:
This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.
Related Articles
Are Credit Card Offers Still Competitive?
By: SimonDuffy | 04/06/2008 | Credit
In my opinion the internet is responsible for most of the change in attitude, not only to credit cards, but finance in general, accross the UK...
How the Credit Crunch is Affecting Existing Credit Card Customers
By: SimonDuffy | 14/05/2008 | Personal Finance
You might wonder why or how the credit crunch can continue to affect the everyday finances of people in UK? Don't forget...
Will the Economic Downturn Affect Small Businesses? a New Perspective
By: xenios thrasyvoulou | 11/12/2007 | Small Business
The recent sub-prime mortgage crisis and the interlinked subsequent turmoil in the financial markets has generated many concerns in businesses and the general outlook on the economy. The question we want to answer is: will it affect small businesses? As a company that deals with small businesses on a daily basis, matching demand for outs-sourced project work with supply of casual labour, Peopleperhour.com offers its own perspective on the matter.
2008 Attack On Tax Havens
By: Roger Munns | 24/01/2008 | Taxes
The UK's Tory Party is producing policy statements to help them win the next Geneal Election.
Their plan to reform taxation and abolish inheritance tax could affect the European tax havens of Monaco, Andorra and Gibraltar.
Families Called Upon To Provide Deposits
By: Abbi Rouse | 12/05/2008 | Mortgage
Those attempting to purchase their first home are increasingly looking to their family to help stump up the initial deposit needed, it has been claimed.
Consumers Move Away From Uncapped Tariffs
By: Abbi Rouse | 07/08/2008 | Personal Finance
With the latest round of energy hikes are released, people are rushing to get themselves themselves on fixed-price tariffs to dampen the effect of the savage cost rises, according to the Fair Investment Company.
How to Find a Cheap Loan Online
By: John Mussi | 13/09/2005 | Finance
A way as to allow them to offer
lower interest rates and can thus make it much more likely to
find a cheap loan online than at a physical lender.
That's part of the reason.
Banking Online Has A Great Deal Of Advantages.
By: Robert Michael | 25/07/2006 | Advice
Online banking is one of the newest internet fad, with millions of users flocking to their personal computers to pay their bills online.
Got a Question? Ask.
Ask the community a question about this article:
Q&A Powered by:
Latest Small Business Articles
Diamond Types
By: Addie Jakson | 20/08/2008
Diamonds remain to be the most fascinating gift that a woman can ever dream about. The word “diamond” is derived from a Greek word “adamas” which stands for “invincible". Diamonds are classified broadly under the categories of Natural Diamond, Synthetic Industrial Diamond and Thin Film Diamonds on the basis of their process of origination. Due to its atomic structure, diamond is the hardest natural matter.
Phoenix Arizona Real Estate, Real Estate Arizona
By: webmaster | 20/08/2008
There is lot of Growth and development in the Real Estate Services in the modern globe. With the lot of advancement in the private property ownership, it has become a major area of business. Buying and selling a Real Estate requires a lot of investment and expertise. That is why most of the people go for Real Estate Agents for these kinds of deals.
Branding, It’s More Than Just Your Usp
By: Suresh Kumar | 20/08/2008
When you mention the word “branding” most people automatically think of USP (unique selling proposition). The overall and incorrect perception of a brand is that it simply consists of the statement you use to define what you do.
Staples of Writing an Effective Grant Proposal
By: USA Grant | 19/08/2008
Grant money is available for the people who need it, but who will know that you need it without a well written request?
Casino Parties, Casino Rental in Nyc, Tristate Area at Casino Lucky Nights
By: Alexei Carpov | 19/08/2008
Find out about casino party rental company in nyc at www.casinoluckynights.com tel:(917)902-6041,casino party nights in nyc. Casino Lucky Nights will provide you with everything you need for a casino event full of fun, laughs, exciting casino games and much more.Visit http://www.casinoluckynights.com
The Pros and Cons of Corporate Bank Loans
By: William Lee | 19/08/2008
The first thing that comes into a prospective business owner’s mind when sourcing for money to start up their business is to go to the bank. It’s convenient, safe and regulated, why would you go anywhere else?
But people must keep in mind that for most things in life, there are its pros and cons. Before you jump on the corporate banking business loan bandwagon, take a while to consider your options and make an informed decision.
10 Tips for Business Success From a Woman Entrepreneur Who Makes $1m Selling Photo Guest Books
By: Lesley Mattos | 19/08/2008
Ten tips for Success in Business to help you grow - both personally and from a business perspective.
Don’t be Afraid to Make Comparisons
By: Kaye Z. Marks | 19/08/2008
Guess what: you have competition.
I know you have competition, and I’ve never worked for your company. Your customers know you have competition. In fact, I’d wager they are the ones most keenly aware of the fact that you have competition, because they’re the people most likely to have interest in jumping the fence and trying that competition out.
More from Andrew Regan
Is Bulgaria the Best Property Investment in Europe?
By: Andrew Regan | 26/02/2008 | Real Estate
British investors are heading east to find the best property buys, and Bulgaria is proving to be massively popular, offering high capital growth and great rental returns; not to mention stunning alpine ski resorts and golden beaches.
London Gears Up for 15th Annual Jazz Festival
By: Andrew Regan | 26/02/2008 | Music
From small jazz clubs to concert halls, the London Jazz Festival has been at the forefront of presenting both home-grown and international talent at a variety of venues for 15 years; with this year’s event set to be the biggest yet.
Effective Guerrilla Marketing is Limited Only by Imagination
By: Andrew Regan | 26/02/2008 | Viral Marketing
Guerrilla marketing can be one of the most effective weapons in a company’s arsenal, and if deployed correctly can generate a massive impact that will lead to an increase in business.
Tips on Business Culture in Dubai
By: Andrew Regan | 21/02/2008 | Ask an Expert
Before going to Dubai on business, or indeed for pleasure, it is important that a visitor has an appreciation of the culture of the country, and that they do as little as possible to offend.
Lollapalooza Gets Set to Raise the Temperature This Summer
By: Andrew Regan | 21/02/2008 | Music
Since 1990, the Lollapalooza touring festival has been the United States’ finest proponent of cutting edge artists and ground breaking new alternative acts playing alongside musical legends, with the 2008 event scheduled to be no exception.
Plucky Pedro Put Benidorm on the Map
By: Andrew Regan | 21/02/2008 | Destinations
Before Benidorm could become a popular holiday destination young Pedro Zaragoza knew he would have to persuade Spanish Dictator General Franco to agree to overturn a ban on bikinis, so in 1953 he got on his bike and went to Madrid to address the General.
Celebrity Spotting in London
By: Andrew Regan | 21/02/2008 | Art and Entertainment
London, one of the world’s largest cities, proves a magnet to tourists and celebrities alike due to the sheer number of exciting activities and experiences to be enjoyed in England’s capital.
Formula One: From Humble Beginnings to Billion Dollar Business
By: Andrew Regan | 20/02/2008 | Cars
Since Formula One first sprouted its roots in the European Grand Prix Motor Racing of the 1920s and 30s, it has become one of the biggest and most expensive sports in the world.
Business 
| Posted: 07-01-2008 | Comments: 
