Owner-managed businesses are avoiding taking on additional debt to fund their company, according to new research.
A survey of 503 business decision makers by Bank of Cyprus UK revealed 58% had no requirement for additional funding in the last quarter, while 34% opted to inject their personal funds, rather than seek external funding.
The research found that 12% planned to apply for increased facilities from their bank in the next 12 months, with only 11% citing access to funding as a “significant barrier to growth”.
But owner-managed businesses (OMBs) continued to be pessimistic about the response they would get from the bank if they applied for further financing, with 24% feeling confident they would get a positive response.
Tony Leahy, head of HR and communications at Bank of Cyprus UK, said: “Given the prolonged difficult climate that OMBs have had to manage through, any signs of optimism should be welcomed and supported.
“Whilst businesses are right to keep a tight grip on their credit management and cash flow until recovery is more evident, it is disappointing that many respondents lack confidence that their bank would support them with additional facilities if needed.”
The Bank of Cyprus UK said the findings reflected an “unwillingness” on the part of OMBs to increase their borrowings until their business shows signs of “sustained” recovery.
It commissioned the research among a panel of 503 business decision makers with ownership or part ownership of a business of fewer than 50 employees.