A somewhat unsteady start to September perhaps, as BDO announce more than half of medium sized businesses looking for long-term funding are failing to find the investment they need over the desired lending period.

The accountancy firm claims that whilst banks appear to be lending again and despite an increased flow of invoice finance facilities, as well as growth in peer-to-peer lending, many business owners are still only left with options for short-term borrowing – meaning that there remains a need for longer-term investment.

The report produced jointly by BDO and CBI suggests that business are struggling to access finance for more than five years and bosses say the government must make an effort to improve the outlook for the ‘forgotten army’ of mid-market firms in the North West.

Ruth Percival, mergers and acquisitions partner at BDO in the North West, added:

“MSBs lack diversity in long-term funding sources, despite being fundamental to creating a balanced and sustainable economy.

“Those scaling up are often investing in innovation, new markets and in boosting their production capacity, all of which needed to be funded with long-term capital. We are not trying to reinvent the wheel. Instead we’re suggesting an innovative adaptation of existing channels.”

Damian Waters, regional director for CBI in the North West, said:

“Building up a British ‘Mittelstand’ of successful medium-sized businesses is mission critical to our economic future.

“A key part of unlocking their enormous potential is for the Government to fix the funding ladder, filling in the gaps in the supply of long-term finance that the North West’s brightest growing firms need to succeed.”

BDO and the CBI have launched ‘Stepping Up’ – a report directed at the Chancellor and making seven key recommendations to encourage the growth of long term patient capital in the UK. The report aims to encourage the creation of new, innovative investment products to kick-start long-term investment for medium sized businesses in Britain.

For more information, visit www.bdo.co.uk/news/stepping-up-fixing-the-funding-gap-for-msbs