Midlands businesses are calling for simpler and greater ways to access growth capital, as more than half consider selling their business in the next 12 months.
According to BDO LLP’s bi-monthly Economic Engine survey of 500 mid-market businesses, more than a quarter of regional companies (26%) believe they would benefit from a greater variety of borrowing products, if smaller banks were helped to enter the business banking market.
Despite the Bank of England choosing to hold interest rates at 5.25%, following 14 consecutive increases, 15% of Midlands businesses believe that the current rate is too high to take out a new loan.
The survey by the accountancy and business advisory firm also found that nearly a quarter of regional businesses (23%) are searching for new sources of funding abroad due to difficulty accessing capital in the UK, with nearly a third (31%) stating that existing schemes do not provide enough support, such as the Enterprise Investment Scheme and the Seed Enterprise Investment Scheme.
Roger Buckley, corporate finance partner at BDO in the Midlands, said: “The issue of raising capital has been a familiar topic of debate for Midlands businesses over the last few months, as they continue to explore ways to meet their strategic growth ambitions.
“While the Midlands corporate finance market remains a good place to do business in, and is well served by private equity and non-debt growth capital that offers companies with an attractive option, there are frustrations being felt which are leading businesses to consider ways of realising the value within their business.”
According to BDO’s Economic Engine survey, remarkably, more than half (51%) of the Midlands companies surveyed are considering selling their business in the next 12 months.
Buckley added: “If this appetite to sell translates into exit activity then this will undoubtedly drive M&A transactions in the regional market, with other factors, such as an impending general election and a slowing pressure on inflation helping to trigger decisions made by businesses.”
