Continuing economic uncertainty means most businesses are still cautious about raising finance in 2013, research finds.
According to a study of 800 business leaders by YouGov on behalf of Baker Tilly, more than 80 per cent of businesses that raised finance over the last 12 months had turned to their bank to meet those funding requirements.
However, despite the generally positive attitude towards banks revealed by the study, businesses are still very cautious about increasing their debt.
Fewer than one in four say they plan to raise finance this year, with just over half reporting they would be looking at traditional bank lending, which represents a 4 per cent increase on last year’s survey.
The next most popular choice is private equity or venture capital, which at 31 per cent is 7 per cent higher than last year. Asset-based lending is the third most preferred option, selected by 24 per cent of respondents.
Of those sectors that said they are planning to raise finance in 2013, the highest number in the survey (50 per cent) is the hospitality and leisure sector, followed by real estate and construction industry at 29 per cent and manufacturing at 27 per cent.
Unsurprisingly, the lowest number of respondents saying they would be seeking additional funding this year is in the education and public sector.
In the financial sector, more than three quarters of respondents in financial services saying they have no plans to raise finance. This is followed by 63 per cent of businesses in the professional services sector, and 60 per cent in real estate and construction.
David Yates of 4 Oceans Capital commented;
These survey results are very interesting, it would appear that the fall in bank lending is not just because the High Street banks are making it more difficult for SME’s but also because SME’s are simply too cautious about raising additional finance in these turbulent times. We have found that well-run businesses with good management and well defined growth plans are able to raise the additional finance they need despite having to jump through a few extra hoops.”
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