DEMAND for business finance remains low, with only one in five companies in Yorkshire and the Humber planning to raise finance in the next 12 months, according to the latest Close Brothers Business Barometer.
The survey also revealed that of the firms which plan to raise finance, 30% will utilise bank funding, while the majority will rely on private equity, government grants or turn to family to finance their business.
Regional Sales Director for Close Brothers Invoice Finance in Yorkshire and the Humber, Lee Hayes, said: “Our findings seem to suggest that many firms are holding back from investment in the present climate, adopting a rather cautious approach to growth.
“While we can understand a conservative approach it may mean that businesses are missing out on opportunities for increased commercial activity, thus impeding on the pace of recovery. Technology and business processes progress so rapidly that SMEs may find themselves struggling to keep up with the competition if they do not proactively invest in their business.”
Almost half of businesses surveyed in Yorkshire and the Humber admitted that the situation has not improved during the last 12 months while 14% claimed that trading conditions have deteriorated in the last year.
Mr Hayes said that if business’s economic outlook is to improve, it’s important they raise their ambitions and reconsider their financial strategy.
He said: “We encourage SMEs to consider a wider blend of financial products to suit their needs – it may just allow them to reconsider their growth aspirations.”