Financing demand falls
Apr 11 2011
Four fifths of existing businesses say they don't need finance
Demand among entrepreneurs for business finance fell during the recession because they believed banks weren’t lending, finds research.
According to a study of 1,800 businesses from consultancy Delta Economics, more than 80 per cent of those surveyed do not need finance or choose to self-finance instead.
There is also widespread belief that banks are not lending (up from 17 per cent in 2009 to 20 per cent in 2010). The study finds as a result, entrepreneurs are less willing to take risks and are choosing instead to tough out the recession without accessing credit.
Rebecca Harding, managing director at Delta Economics, says, ‘British business is slowly weaning itself off credit dependence. Entrepreneurs are choosing to protect their businesses by not taking financial risks and instead prefer to self fund to keep their businesses afloat.
'This helps to explain why the demand for finance is so low at the moment.’
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