According to a survey, difficulty accessing capital is forcing nine in 10 (91%) mid-sized businesses to curb their growth plans. The survey, by accountancy firm BDO, reveals nearly one in four (24%) are being forced to scale back the business or make redundancies as a result of difficulty accessing capital. Some 22% are unable to finance plans for expansion, with a further fifth (20%) struggling to invest in new technology or software to improve their business for this reason.
“Despite staying resilient through an incredibly difficult time, tough challenges remain for mid-sized businesses, with access to capital becoming a critical issue,” says Richard Austin, partner at BDO.
Against this backdrop, businesses are turning to private capital markets for potential funding solutions. Private equity investment is the most attractive source of capital for almost a third (32%) of those in need of new funding, followed by equity capital markets (28%) and government support schemes (25%).
As a result of tough economic challenges, 40% will need to raise funds over the next year, while a further third (33%) plan to source new financing in the next 13 to 18 months.
“As the engine of the UK economy, these companies are responsible for a large, vital proportion of its income and employment and their success will play a key role in the economic performance of the UK overall,” Austin says. “Businesses believe more can be done to address their concerns, drive their growth and ensure the UK remains an attractive place to do business both today and in the future.”
Source: BDO
Source: BDO
Source: BDO
Philip Smith is editor of The Treasurer
