A recent PCG poll has revealed that almost two thirds of limited company contractors and freelancers do not use their overdraft facility on the bank account.
The latest Professional Contractors Group (PCG) survey found that 59% of respondents do not use their overdraft at all, with 16% saying that they only use it in the event of an emergency.
Of the contractors surveyed, 16% said that they would find themselves in financial difficulty if their bank were to remove an overdraft facility. The remaining nine per cent only use their overdraft on a casual basis, simply ‘because it’s just there’…
Research and Information Manager at PCG, Suneeta Johal, explains that being cautious about finances is often the key to success for independent professionals.
She said, “According to research from Bacs Payment Schemes carried out in July of this year, small companies are owed £35 billion in unpaid invoices, mostly from large firms.
The reality for many freelancers is that securing payment from clients can take time and the temptation to use an overdraft facility as a buffer while waiting for payment must be huge.
It is reassuring to see the majority of freelancers are planning well and have a sensible buffer in place should they need it.”