Getting Pressured to Repay "Bank of Mum and Dad" Loans?
A recent report by the Australian government’s Small Business Ombudsman, Kate Carnell, indicated that more than 25% of small and medium enterprise loans are being funded by the parents of small and medium enterprise owners.
The “Bank of Mum and Dad” is being forced to fund a significant amount of the loans to small and medium enterprises because of the credit crunch which has been worsened by the fallout from the Banking Royal Commission, Kate Carnell was reported as saying in a recent article in the “Financial Review”. (Click here).
“Falling residential property prices are compelling the difficulty in borrowing, because most lenders require small and medium enterprise owners/shareholders to put up their houses as collateral”.