The survey comes as payday giants make headlines again this week, with representatives from Wonga, QuickQuid and Mr Lender scheduled to appear before the Commons Business, Innovation and Skills Select Committee. The committee will investigate an Office of Fair Trading report that found ‘deep-rooted’ problems in the way payday loans attract and treat customers.
Today’s survey of British freelancers and microbusiness owners found that 92 per cent of people have not used an emergency loan service and wouldn’t even consider it in a crisis. A further 6.2 per cent revealed that while they haven’t used one, they would consider it. Only 1.7 per cent of businesses admitted they had used the service, but only as a last resort to maintain their business cash flow.
Darren Fell, MD of Crunch Accounting, said that the research shows that while credit is still hard to come by, the majority of freelancers and micro businesses are savvy about alternative funding opportunities: “These startling results show that, even though credit is still hard to come by for many freelancers and micro businesses, the overwhelming majority would never turn to a high-interest lender. The astronomical interest rates, combined with huge penalties for late repayments, make them totally unsuitable for sole traders and self-employed professionals.
“With alternative sources of finances such as peer-to-peer lending and Credit Unions becoming more and more popular, hopefully these kinds of loans will soon be a thing of the past,” added Fell.