Small businesses are avoiding taking on any additional debt as they continue to anticipate a return to growth, according to studies conducted by the Bank of Cyprus UK.
The organisation’s monthly ‘Owner Managed Business (OMB) Barometer’ showed that 58% did not need any additional help from their bank, while a further 34% put in their own money instead.
When asked about the upcoming year, 12% admitted they would be applying for further funding in the next 12 months, while 11% indicated that a lack of financial help from their bank was one of the key factors stalling their growth.
Only a quarter felt that any request for more money from their bank would yield a positive response, highlighting a feeling that there is a lack of support from financial institutions for businesses.
However, this renewed care surrounding credit management is positive for credit control staff, who will be hoping to see clients with enough cash to ensure invoices are settled on time.
Business owners remain hopeful of end to recession
Despite an apparent feeling of negativity towards banks, it seems businesses are anticipating an imminent end to the recession, with nearly half of all companies asked indicating that they expected their business to grow over the next year.
Faced with short term challenges, 53% of businesses have focused on maintaining existing customers, as this is seen as less of a credit risk than going after potential new consumers.
An additional 18% indicated they had shifted the focus of their company to improve their survival chances.
Coupled with their reticence about taking on more overheads from the bank, this indicates businesses are favouring a cautious approach to try and ride out the recession. However, with the media counting the number of empty shops on streets every day, it remains to be seen how successful this tactic will be.