Lack of finance options stalling growth at medium-sized UK firms
UK medium-sized businesses have cited limited access to finance as their biggest barrier to growth ahead of the Autumn Budget, according to a new report.
UK business advisory and accountancy firm Menzies surveyed 500 leaders of mid-size and large businesses to understand what was stalling them from making the leap from medium to large in the UK.
It found that almost one in five business leaders saw finance as their number one barrier to growth, while almost all business leaders surveyed (96 per cent) who had made the leap from a medium to a large business said they had faced a range of financial hurdles.
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Breaking down what those barriers were, 40 per cent of respondents said they had experienced limited access to cash from banks and other lenders, while high operational costs and challenges in securing investment were each experienced by 39 per cent of respondents.
Other hurdles cited by respondents included high cost of borrowing (33 per cent), managing cash flow (30 per cent), insufficient financial planning (29 per cent), identifying and mitigating financial risks (19 per cent) and inconsistent tax policy from government (10 per cent).
Meanwhile, the survey found that many business leaders were distracted by tactical tasks and firefighting. Just 44 per cent of respondents said that they always felt able to focus on taking important strategic and long-term decisions in a considered way.
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Financial management and budgeting came out top of the list of distractions, with 21 per cent saying that activity diverted their attention, while HR and recruitment (18 per cent), digital transformation (13 per cent) and regulatory compliance and reporting (11 per cent) were also a major distraction.
“The leap from medium to large is a large one, and often means grappling with the challenge of securing adequate external investment, which will likely be a new experience for some,” said Menzies managing partner Simon Massey. “Many businesses are overlooking routes to growth, or negating the use of alternative funders or facilities, often due to unfamiliarity with their products or misconceptions on their function or availability.”
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