Business owners choose own funds over banks
Through its Owner Managed Business Barometer the Bank of Cyprus discovered that OMBs were avoiding taking on additional debt as they nursed their businesses back to recovery.
Tony Leahy at Bank of Cyprus UK said: “Whilst businesses are right to keep a tight grip on their credit management and cash flow until recovery is more evident it is disappointing that many respondents lack confidence that their bank would support them with additional facilities if needed.”
Looking forward just over one in 10 respondents (12%) planned to apply for increased facilities from their bank in the next 12 months with a similar number (11%) citing access to funding as a significant barrier to growth.
Despite some signs of cautious optimism the results reflected unwillingness on the part of OMBs to increase their borrowings until their business shows signs of sustained recovery.
Even so OMBs continued to be pessimistic about the response they would get from their bank if they applied for new facilities, with just one in four respondents (24%) feeling confident that they would get a positive response.
Leahy added: “To support recovery it is vital that OMBs and their banks are engaged in dialogue to avoid any shocks but also to remove any doubt or uncertainty that may inhibit confidence in planning for the future.”