The current economic uncertainty means most businesses remain cautious about raising finance in 2013, research finds.
According to a survey of 800 business leaders by YouGov as the agent of Baker Tilly, over 80 per cent of businesses that raised finance over the last 12 months had turned to their bank to meet those funding needs.
Yet, despite the generally optimistic mindset towards banks revealed by the study, businesses are still extremely cautious about increasing their debt.
Less than one in four say they plan to increase finance next year, with just over half of businesses reporting they would be looking at traditional bank lending, which indicates a 4 per cent increase on last year’s study.
The next most popular choice is venture capital or private equity, which at 31 per cent is 7 per cent higher than last year. Asset-based lending is the third most favoured choice, selected by 24 per cent of respondents.
Of those sectors that said they were planning to increase finance in 2013, the highest number in the study is the hospitality and leisure sector at 50 per cent, followed by construction industry and real estate at 29 per cent and manufacturing at 27 per cent.
As expected, the lowest number of respondents saying they would be pursuing additional funding in the coming year is in the education and public sector.
More than three quarters of respondents in financial services said they have no desire to increase finance over the year. This is closely followed by 63 per cent of businesses in the professional services sector, and 60 per cent of businesses in construction and real estate.
Head of M&A and private equity at Baker Tilly’s, Rob Donaldson, states, “In the current climate, it’s not surprising that so many businesses are cautious about raising new finance. Our findings validate what the banks have been saying for some time – credit is falling because of a lack of demand, not just supply.
“It is encouraging to see that business has moved on from ‘banker bashing’. While mistakes were made, our respondents recognise that banks are not the ‘bad guys’ they have often been portrayed by some sections of the media. For well-run businesses with good information and strong growth plans, raising finance is not an insurmountable problem.”
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