Covid-19 intensifies personal finance risk to SMEs

COVID-19 Financial Services Response Network | World Economic Forum

Survey shows seven in 10 small-business owners have used some form of support for their business since March. The most common option was PPP loans, with 30% saying they received one, followed by 24% saying they turned to personal credit cards and business savings accounts. In total, 35% of owners used either personal credit cards or savings accounts, with 10% using both, to support their business. This personal funding has further blurred the line between personal and business finances. Small businesses that bring in less than $1 million annually typically need the owner to personally back the debt, meaning they’re responsible if the company can’t pay. This leaves entrepreneurs on the hook for the risk, even if it’s in the name of their business. While this has always been the case, the pandemic has intensified the personal financial risk to small entrepreneurs