By Lea Pachta
The number of UK privately held businesses (PHBs) that expect finance to be more readily available to them has increased more than five-fold according to the latest International Business Report (IBR) survey from finance and business advisors, Grant Thornton UK LLP.
The survey of 500 UK PHBs (unlisted companies including family, entrepreneurial and SME businesses) reveals that 44% expect finance to be more accessible during 2010, a significantly higher figure than last year’s response of just 8%. Only 20 % of UK PHBs surveyed expect finance to be less accessible this year compared to 69% last year. A higher number (32%) this year than last year (22%) of PHBs, believe there will be no change to the level of finance available.
Despite the expectation of an increase in access to finance in 2010, there has been a 10% drop in the number of businesses that feel their lender is less supportive now than a year ago. 69% of PHBs feel their lender is supportive or very supportive compared to 79% in 2009.
In addition to the fall in perceived support from lenders, the survey highlights several barriers facing private businesses wanting to expand. It reveals that the greatest constraints on the ability to grow businesses is a shortage of orders/reduced demand as cited by 35% of respondents. This is followed by red tape (28%) a and a shortage of working capital (18%).
The survey shows regulation/red tape as the only constraint to have increased this year. There is a 3% increase to 28% compared to 2009 (25%)of PHBs that believe red tape to be the biggest constraint to their ability to expand.
Only 13% of UK PHBs identified the of availability of a skilled workforce as a significant constraint on the ability of businesses to expand. This may reflect the current high levels of unemployment, the pool of available skilled workers or the reliance of businesses on their workforce to help them succeed in the coming year.
David Campbell, Head of Privately Held Businesses and Regional Managing Partner says: “Privately held businesses in the UK seem to be growing in confidence about the level of finance they expect to be available to them in the coming year. This increase in optimism supports the view that UK lenders are loosening the tight controls placed on finance as the economy begins to edge out of recession.
“However, despite an upbeat attitude, concerns over demand for products and services are the biggest threats to expansion. It is clear that the economic crisis and its effects on consumer and business confidence are going to be with us for sometime.”