New study shows firms in Liverpool city region and across the North West says accessing capital is one of the biggest obstacles to investment and growth. Tony McDonough reports

Businesses in Liverpool city region and across the North West are struggling to access the capital they need to invest and grow, a new study claims.

A survey by accountancy practice BDO reveals 37% of firms in the North West are struggling to secure funding, whether that’s through bank loans, private equity, private credit loans, or Government grants.

This comes from BDO’s latest bi-monthly Economic Engine survey of 500 mid-market businesses. It also revealed that despite inflation easing in recent months, regional businesses are still suffering from inflationary pressures.

Two-fifths of North West companies (40%) said declining customer demand, triggered by consumers spending less due to ongoing high living costs, as well as an increased number of B2B customers going out of business, was impacting their bottom line.

This is reflected in the latest research by trade association R3, which shows that insolvency related activity in the region rose 4.7% when compared with the same period in 2023.

Angela Cross, head of BDO in the North West, said: “Inflationary pressures continue to be a significant thorn in the side of North West businesses, with many still feeling the effects of stubborn energy costs and rising wage bills, amongst other things.

“As a result, access to capital is absolutely key to allowing these businesses to grow, but it is clear that there needs to be significant improvements in this area.

“Despite trading conditions remaining difficult, the outlook for businesses is starting to shift.

READ MORE: Four Merseyside firms secure King’s Awards

READ MORE: ‘Why can’t we have outside seating in Liverpool?’ asks topn chef

“According to our survey, over three-fifths of North West businesses feel more confident about their business prospects this year, compared to the second half of 2023 when the UK recorded a technical recession.

“It is positive to see some optimism, but North West businesses cannot achieve their growth ambitions alone… they need to see better access to capital and a clear and comprehensive business tax roadmap for the next five years.”