Finance is the ‘real challenge’ facing entrepreneurs
Access to finance remains the biggest challenge facing small and medium sized businesses in the UK, a new report has revealed.
The research found that funding was the main obstacle to growth for companies as 62% chose to self-finance or use savings to grow and develop, rather than taking on debt, with just 26% turning to banks for finance.
Furthermore, the report by law firm Mishcon de Reya and the London Chambers of Commerce and Industry (LCCI), discovered that 40% of businesses reported that their lack of investment was not during the recession and that 30% had no plans to invest in growth for the next two to five years.
‘The Entrepreneur Report’ said: “What this shows is that there are underlying factors for not funding growth and development beyond current market conditions. The government must, therefore, find ways to further incentivise business investment, as the economic recovery does not guarantee it.”
The study offers a number of recommendations including; providing advice for entrepreneurs on achieving and sustaining long-term growth, government initiatives to encourage a wider range of finance options and greater collaboration between the private and public sector.
Colin Stanbridge, chief executive of LCCI said: “Some 490,000 private sector jobs must be created in the coming year to meet current economic forecasts. Entrepreneurship will be critical to secure a sustained recovery as well as to build the long term growth necessary for the UK to compete effectively in the global market.”
© Crimson Business Ltd. 2010