Can I ask a few questions, which may come across as rude?
How did you get yourself into £20K debt? Are you currently living beyond your means if you are eating into your savings?
Obviously I don’t know the full ins and outs, but do you feel you have the financial discipline to run your own business? Will you be able to fully budget for all costs, including potential unseen costs? Have you fully researched the market, and will you have work from day one, or will you have to work for a month or two without a wage before the clients appear?
I would have thought you may want to sell a lot of things and clear down that debt as much as possible before starting your own business. You would be starting a new business in what could well be an ongoing downturn. How do you feel the economy will develop and is this really the right time?
I am not starting my own business, but I am taking a year out, and fully funding myself. But it has taken me some time to save and save and be very disciplined in terms of not buying myself stuff, just the essentials. Maybe you need to be disciplined, work hard on recitfying you current precarious financial situation, and then when you are ready, go into self employment?
Good luck with whatever you decide. Really hope it works out in the long run.