Research from May 2011 by Investec Specialist Private Bank (Investec) among some of the UK’s most successful entrepreneurs reveals that over the next 12 months, 39% expect conditions for accessing external sources of capital to be ‘normal’ or ‘easy’. This compares to 25% who said this six months ago.
However, 60% still expect access to capital to be ‘very hard’ or ‘quite hard’, but this is down from 75% last November.
The findings reveal that successful entrepreneurs will use a variety of sources to secure capital over the next 12 months. Fifty-nine percent expect to use a bank loan or overdraft, compared to 61% in November 2010. Just over one in three (35%) plan to raise equity through venture capital and/or private equity (compared to 25% last November), and one in four (24%) will use invoice discounting or asset based lending (excluding leasing).
Investec is seeing a strong increase in demand for capital from successful entrepreneurs as many of them have plans to launch new products and businesses. Indeed, its research reveals that 72% of entrepreneurs interviewed said it is either ‘very likely’ or ‘quite likely’ that they will do this over the next 12 months. This compares to 46% who said they would do this in December 2009.
Only 22% of those interviewed said that they had no plans to raise capital from external sources over the next 12 months, with 26% planning to raise £10 million or more.
Ed Cottrell, head of Investec’s growth and acquisition finance team, said: “Our findings suggest that many of the country’s leading entrepreneurs are feeling optimistic about their future prospects, but these could be put in jeopardy if they cannot obtain access to capital. This is a very exciting opportunity for us, and we are proactively looking to lend more to our core audience of mid-sized companies who wish to raise between £5m and £50m to support organic or acquisitive growth strategies.”
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