Half a million UK SMBs applying to the Bank of Mum and Dad to help fund their businesses*
43 percent of young entrepreneurs believe starting a business is a better investment than further education
LONDON, 15 May, 2019 – The Bank of Mum and Dad has been integral in funding the property sector, with one in four housing transactions in the UK reliant on funding from family1. Research from Worldpay, Inc. has found that family funding is also supporting the UK’s dynamic small business scene, with one in in ten entrepreneurs surveyed looking to their parents to invest in their business. In fact, Worldpay has uncovered that under-35s are twice as likely as older generations to ask for help from family to invest in their business, indicating that this may be a growing trend as younger generations increasingly aspire to become entrepreneurs.
In the UK, the number of self-employed young people has doubled since 20012 with research finding that 30 percent of millennials aspire to run their own business3. One reason for this trend may be that Gen Y and Z view starting a business as an attractive alternative to attending university. Worldpay’s study of small business owners found that over a third of respondents felt that starting a business was a better investment than going to university – rising to 43 percent for millennials.
Jack Button, entrepreneur and owner of Jack’s Jetty Snacks is one such example: “I always had an entrepreneurial drive, so for me, setting up a business made more sense than going to university. Instead, I worked to build multiple sources of income, from an office job to renovating a flat, and moved in with my parents to save money. This hard work meant I had the funds to start my business. My parents and family were a huge part of this, helping me to decorate the café, serve customers, and lend a helping hand where needed – not to mention putting me up when I was saving. Having the support of my parents has been a big factor in the success of my business.”
Equally, with the start-up scene flourishing in the UK4, traditional views of the world of work and career paths are shifting. Beverly Power, entrepreneur and founder of The Travelling Cupcake said: “I would hate for my children to be stuck in a mundane 9-5. I came from a background of entrepreneurs, so I would definitely help my children grow a business if that’s what they wanted to do. My oldest has already set up his own business, which I help with where I can! The point I always press with my children is that they can do anything they set their minds to. If that’s education then great, but if not, university can happen at any point in your life – it doesn’t have to be the first step.”
Steve Newton, Executive Vice President of UK and Europe, Worldpay, Inc. said: “With the UK start-up scene defying economic uncertainty and growing over 5 percent this year5, it’s clear that the UK has a strong entrepreneurial spirit. The challenge is to ensure that we’re creating the best environment and enabling access to the right support and tools for small businesses to succeed in the long term.
“While it’s great if a business can be a family affair, not everyone will be in a position where this is possible. It’s imperative that aspiring entrepreneurs can access start up and working capital regardless of their background. Technology can be a great enabler for helping to foster this diversity by opening up new routes to finance that haven’t traditionally been available. Worldpay Business Finance is one of these – providing working capital to small businesses by giving them the flexibility to pay back the finance only when they are earning. We’re really proud to have funded over £100 million to UK small businesses since 2015. Our message to entrepreneurs is that it doesn’t matter who you are or where you come from, if you have a drive to grow a small business nothing should stop you”.
Notes to editors:
About the data:
The research was compiled in partnership with YouGov. Over 1,000 senior decision makers across UK small businesses were interviewed. The number of SMBs involving parents in business funding is taken from parliamentary figures of total UK SMEs (5.7m in 2018), with YouGov data applied (10 percent of small business owners looking to parents to help fund their business).
Worldpay, Inc. (NYSE: WP; LSE: WPY) is a leading payments technology company with unique capability to power global omni-commerce. With an integrated technology platform, Worldpay offers a comprehensive suite of products and services, delivered globally through a single provider. Worldpay processes over 40 billion transactions annually, supporting more than 300 payment types across 146 countries and 126 currencies. The company is focused on expanding into high-growth markets and customer segments, including global eCommerce, integrated payments and B2B. Visit us at www.worldpay.com.
Liberis is a leading alternative finance provider, offering simple, flexible and transparent funding to help UK SMEs achieve their ambitions. Through its Business Cash Advance, an innovative form of funding, Liberis links repayments directly to cash flow so businesses only repay when their customers pay them. Liberis is backed by the UK Government owned British Business Bank and is part of Blenheim Chalcot, the UK’s leading venture builder. To date Liberis has helped over 6,000 SMEs, advanced £210m in funding through Business Cash Advance6 and supported over 35,000 jobs in the UK7.
For more information, please visit www.liberis.co.uk
*Number of SMBs involving parents in business funding taken from parliamentary figures of total UK SMEs (5.7m in 2018), with YouGov data applied (10 percent of small businesses owners looking to parents to help fund their business).
6 Between 2007-2018
7 Since 2007