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Optimistic companies look to alternative finance options

Category: Scotland Finance News — Gary Cain on October 6, 2013

New research has shown that optimistic business owners are more likely to consider different commercial finance options than their pessimistic counterparts.

The report, which was put together by a team of experts from the financial industry, has shown that less confident firms are more likely to stretch their overdrafts and increase credit lines. Boosting cash flow through other methods is often preferred by those looking to expand, however.

Selecting newer methods of finance, such as invoice discounting, is seen as more appropriate for business growth. The less confident a business is, the less likely it is to look at alternative options such as invoice financing, which helps many companies in Scotland and across the UK to expand.

More than 450 decision-makers at SMEs were polled in the study. Of those quizzed, 17 per cent said they had applied for finance in the last 12 months. Of those applying, 32 per cent were looking to fund ongoing operational activity and payroll, whilst 28 per cent wanted to invest in the future and business development.

The findings also pointed to greater levels of invigoration in the sole trader sector, with the group accounting for more than 60 per cent of the total number of applications for finance put through.

However, the report also found that larger firms were still increasingly likely to be given bank loans and tend to find access to traditional funding easier.

Manufacturing companies were also seen to find funding hardest to secure, though alternative finance methods are assisting here, and in such areas as construction.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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