It’s not, the adage goes, a lack of profitability that kills businesses, but a lack of cash.

The critical nature of cashflow is why most business owners will seek some form of funding at some stage. It might be to tide them over until payment finally comes through for work they’ve spent money completing, or to invest in new equipment, or to hire an extra member of staff that will enable expansion. Whatever the purpose, our research at the Federation of Small Businesses (FSB) shows six in 10 small businesses have applied for external finance in the past five years.

But, while the Dragons’ Den-type experience of pitching to a panel of angel investors is great TV and perfect for some (look at Levi Roots, who secured £50k for his Reggae Reggae Sauce, then built up a business worth a reported £30 million), the reality for most is much less showbiz.

According to the British Business Bank’s latest Scotland SME access to finance report, credit cards are the most commonly used finance option for smaller firms, used by 29%, and overdrafts, used by 22%.

However, when you look at other finance........

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