Half of UK entrepreneurs rely on the bank of mum and dad

Some 53 per cent of the entrepreneurs surveyed said that money from family members had been key in getting their business of the ground

Vehicles negotiate the Old Street roundabout in Shoreditch, which has been dubbed 'Silicon Roundabout' (Getty)

More than half of Britain’s entrepreneurs rely on money from their families to grow their business.

Access to financing remains one of the top concerns for small businesses, according to a new survey.

Some 53 per cent of the entrepreneurs surveyed said that money from family members had been key in getting their business of the ground.

More than half, some 56 per cent, relied on personal unsecured finance such as credit cards, a further 45 per cent used the money they got from their friends, according to research by the Institute of Directors (IoD).

A lack of financing and a general skills shortage are among the biggest risk undermining UK’s start-up scene, according to a new survey by the IoD 99 network – a group of more than 650 entrepreneurs under the age of 35.

Nearly 40 per cent of the surveyed said the difficulty accessing financing prevented their company from growing, while 42 per cent said they have trouble hiring people with the right skills, according to the IoD .

Jimmy McLoughlin, Deputy Head of Policy at the IoD, said that the start-up revolution has taken hold in Britain like nowhere else in Europe.

“Finding people with the right skills, and tapping into the right mix of finance will be the biggest factors in achieving scale-up success. For start-ups, overcoming these obstacles can be the difference between success and failure,” he said.

McLoughlin called for the government to make it easier for savers to invest in young companies and warned politicians against UK restrictive immigration system, which might make it harder for growing firm to bring in skilled employees from abroad.

“It is a worry that so many start-ups struggle to hire skilled employees. Therefore, it is crucial that Britain’s immigration system is as open and easy to navigate as possible,” he said.

Developments in alternative finance like crowdfunding and peer-to-peer lending giving entrepreneurs better options, McLoughlin added. “We should strip back the layers of complexity which currently stand in the way,” he said.

Over 60 per cent of young entrepreneurs were in full-time work when they started their own business, according to the survey.

The UK currently ranks sixth in list of best places to start a business, according to the Legatum Institute.

The data showed that 88 per cent of Britons believe that if you work hard you can get ahead in life, up from 84 per cent last year, and 78 per cent in 2010, some of the highest rates of optimism in the EU.