Personal credit facilities such as credit cards and personal loans have been used by one in eight senior decision makers at small and medium-sized enterprises (SMEs) for company financing over the past 12 months, according to research published by Santander Corporate & Commercial.

The SME Access to Finance study of 683 senior decision makers at UK businesses also found that 25% had relied on overdraft facilities over the past year.

This is especially common in the North East, where 26% of SMEs said they had used personal credit facilities as financing for their businesses – a figure that represents more than double that of the national average.

Santander Corporate & Commercial's study also found that 8% of companies admitted they had never reviewed their finance requirements with a view to financial stability or to assess how much money is required to execute new projects.

Forty-three per cent of businesses said they were concerned or very concerned about cash flow over the next 12 months.

The biggest problem, experienced by 25% of SMEs, was late and failed payments from customers but, despite this, just 5% said they had used invoice financing in the past 12 months.

Cash flow worries are most prevalent in London, where 38% of business managers were either concerned or very concerned about their cash flow in the next 12 months.

Mike Reeves, joint managing director of SME Banking at Santander, said: "It's worrying to see that many of Britain's small firms are relying on personal credit facilities to finance their businesses, and are concerned over effectively managing cash flow.

“If businesses are experiencing problems with late or failed payments, then the simple answer is invoice finance. It's a tried-and-tested method of unlocking the value of unpaid invoices, providing companies with immediate access to their money.

"SMEs are the lifeblood of the UK economy, helping to create jobs and drive local economic growth. Santander Corporate & Commercial knows that and, as a scale challenger, we bring a unique approach to help all UK businesses achieve their growth ambitions."

Santander Corporate and Commercial says it has developed products and services to help SMEs manage cash flow and secure long-term funding.

The bank's Breakthrough programme includes its Growth Capital lending programme, which offers a differentiated service said to be designed for fast-growth businesses.

In addition, Santander Corporate and Commercial's referral partnership with peer-to-peer firm Funding Circle is evidence of the bank's commitment to SMEs, it says.