Third of businesses use loans to fund reinvestment plans
More than a third (35 per cent) of business owners are using business loans to fund their reinvestment plans, due to ongoing uncertainty in the global economy.
According to a new survey by BusinessComparison, macro-economic conditions such as high inflation and energy costs have affected 57 per cent of businesses’ reinvestment plans.
Over half of business-owners have had to adjust their reinvestment strategies with 35 per cent now relying on business loans, while 34 per cent are securing funding from current stakeholders. 33 per cent are reliant on funds being invested by the company director.
‘’Our exploration into businesses’ reinvestment plans and whether they’ve been affected yielded some interesting insights,” said Philip Brennan, founder and managing director at BusinessComparison.
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“Specifically, it was shocking to learn that over half of business leaders surveyed revealed their plans had been altered as a result of global circumstances.
‘’It was also intriguing to see the regions investing the most, with the East of England investing almost half of their profits on average. Although the current situation poses a real problem for businesses, it was encouraging to see so many maintaining reinvestment plans.’’
While businesses based in the East of England were the largest investors, the lowest was the South East region with an average reinvestment of 28 per cent of profits.
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The regions investing the most on a yearly basis were the North West (67 per cent) and Greater London (66 per cent).
53 per cent of business owners told BusinessComparison that they still invest cash back into their business annually, while 19 per cent said that they will reinvest depending on the profits received.
The national average investment was a total of 37 per cent of profits.
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