Businesses look for alternatives to bank funding

BUSINESSES HAVE PROVED positive towards the banking support they’ve received in the last 12 months – although many companies will eschew them for lending next year.

Baker Tilly’s YouGov survey of 800 business leaders found that of those that raised finance in the past 12 months, more than 80% used their banking for funding.

However, only a quarter of respondents will look to raised finance in 2013 – with just half of those looking at traditional bank lending. Of the respondents looking to raise finance, 31% will look at private equity or venture capital. Asset-based lending was third most popular, at 24%.

On a sector-by-sector basis, half of the hospitality and leisure sector respondents said they would look to raise finance, followed by construction (29%) and manufacturing (27%).

More than three-quarters of financial services respondents said they had no plans to raise finance over the coming year.

Rob Donaldson, Baker Tilly’s head of M&A and private equity, said: “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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