Capital shortage see firms cut back growth plans

New survey from accountancy firm BDO reveals shortage of capital forces North West firms to cut back on growth plans and lay off staff. Tony McDonough reports

Warehouse, factory, business, manufacturing, economy
Companies are having to cut back on growth plans due to a shortage of capital


Almost nine in 10 businesses in the North West are struggling to access the capital to fund their growth plans.

Accountancy firm BDO has released its latest bi-monthly survey of 500 mid-market businesses. It reveals 87% of businesses admit difficulty in accessing capital is putting the brakes on growth and forcing some to make redundancies.

More than a quarter (29%) are struggling to repay loans or credit. And 26% admit that a shortage of funding means they are unable to increase salaries as they’ve done in the past to cover promotions and annual reviews.

BDO’s survey also highlighted the ongoing challenges facing North West businesses. Over the next six months, supply chain disruption will continue to blight regional companies.

More than a third (39%) say delayed deliveries, stock shortages and cost increases are their number one concern.

As businesses in the region contend with a growing list of problems, investing in research and development, and new technologies is one of the top business priorities for more than a third of regional companies (39%).

A further 32% are also looking to improve cash flow or generate new sources of revenue, in a bid to tackle the disruptions being faced.

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In addition, more than a quarter (29%) intend to focus on upskilling and retaining their existing workforce, as North West companies look to take action over the next six months.

Ed Dwan, regional managing partner at BDO in the North West, said: “As a result of the tough economic conditions that continue to hamper regional businesses, companies are facing a real and immediate need to raise funds within the next 12 months.

“Against a challenging backdrop, North West businesses are having to explore every option when it comes to raising additional finance, with many struggling to access the capital they need.”

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