Demand for business finance remains low, with only four in 10 companies in Connacht planning to raise finance in the next 12 months, according to results of the latest Close Brothers Business Barometer.
The survey also revealed that of the firms which plan to raise finance, just a quarter will utilise bank funding, while the majority of business owners in Connacht will rely on private equity, government grants, or turn to family for financial support.
Paul Stephens, head of sales for Close Brothers Commercial Finance in Ireland, 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. “Thirty per cent of businesses surveyed in Connacht admitted the situation has not improved in the last 12 months while a further 20 per cent of local businesses claimed that trading conditions have deteriorated in the last year.”
Mr Stephens continued: “If their economic outlook is to improve, it’s important that businesses raise their ambitions and reconsider their financial strategy. Our figures suggest that many are unsure of the funding options available to them, in fact, over 70 per cent of firms in Connacht remain unaware of the benefits of invoice finance and over half have not heard of asset based lending. “These are fast growing products that allow a business to raise cash instantly against the value of its unpaid invoices or assets such as property and stock, and can therefore help a business overcome what is often its greatest impediment to growth – weak cash flow.
“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,” he added.
For more information and news about Close Brothers Commercial Finance visit www.closecommercialfinance.ie