More than half (55 per cent) of businesses which received bounce back loans used the money to either grow or diversify their business.
According to new research from Enterprise Nation and Starling Bank, 36 per cent of the small- and medium-sized enterprises (SMEs) which received a bounce back loan used it to pay the bills, while 35 per cent have kept funds in reserve and 27 per cent used the cash to invest in their business.
Almost half (48 per cent) of SME owners said that their bounce back loan had helped strengthen their mental wellbeing.
18 per cent of the business owners who were surveyed said that their bounce back loan has led to “significant growth”.
“Bounce back loans have been a lifeline for SMEs,” said Helen Beirton, chief banking officer at Starling Bank.
“Not only have the funds allowed them to pay the bills and maintain crucial supply chains but it has enabled them to find the funds to flex their business model and better ride the wave of the pandemic.”
The study also found that interest in the government’s new Recovery Loan Scheme is high, with 70 per cent of the SME owners who took out a bounce back loan saying they would consider applying.
“What this research shows is the resilience of small firms,” said Emma Jones, founder of Enterprise Nation.
“Despite many having taken on a loan for the first time, they have put these funds to good use. The money has allowed them to confidently pivot, introduce new products and services such as online ordering systems or boost their e-commerce provision and enhance their online marketing. This must be a relief for the government to hear.”