Entrepreneurs expect access to capital funding to be difficult in 2011, with many of those turning to alternative sources, a new report has revealed.
Research by Investec Specialist Private Bank has found that 75% of business leaders expect it to be ‘difficult’ to secure capital in 2011, up from 64% in June last year. The report has also suggested that many of the respondents will look to alternative sources, with 6% intending to use credit cards and 8% looking to borrow from friends, family and associates.
Ed Cottrell form Investec Specialist Private Bank said: “Many of Britain’s leading entrepreneurs – individuals we define as members of the ‘Entrepreneurial Class’ - are feeling more optimistic about the next 12 months and have significant plans to grow their operations, which will be good news for the economy and jobs as a whole. However, our research suggests that their plans could be jeopardised because of difficulties in securing capital.”
Despite this, 61% of companies still plan to use bank loans and overdrafts this year, but the main source of capital will be retained earnings, which eight out of 10 entrepreneurs (81%) intend to use to fund their business.
However, nine out of 10 business owners expect the profitability of their firms to increase in 2011, with four in 10 saying that it is very likely they will launch new ventures over the next 12 months.
© Crimson Business Ltd. 2011