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Property plunge threatens small businesses

Property plunge threatens small businesses

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A softening property market could jeopardise small businesses, one industry insider has claimed.

According to Oxford Funding chief executive Rob Lamers, small business owners often secure finance using the value of their homes, but the tepid sector may cost businesses vital funding.

"The slowdown in the property market will affect business cash flow if a loan is secured by a property's value," Mr Lamers said.

"Now that auction clearance rates have dropped, a property may undergo a revaluation that results in reduced credit."

Many small businesses secure loans against property, but Mr Lamers said this may not be the most appropriate long-term solution.

"It's better to have finance secured by your business, not your home, which doesn't grow to match your business," he said.

 

 

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Property plunge threatens small businesses
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