Funding environment getting better, says ECI

A SURVEY of 650 companies by the mid-market private equity house ECI Partners has discovered a “dramatic improvement” in funding conditions.

ECI, based in London and Manchester, said companies are finding it easier to tap bank funding, with a significant increase in companies looking to public markets and private equity to provide capital.

ECI sold Bolton-based IT healthcare firm Ascribe in a £57m deal last month and exited Bargain Booze through a £64m flotation in July.

Some 54% of companies polled said they expected it to be “easy” or “very easy” to obtain growth finance over the next 12 months, up from 36% in 2012.

More are considering private equity with 57% saying they would consider this route, up from 40%. And 41% said they would look to public markets to finance growth, up from 9% in 2012.

Managing partner David Ewing said: “The importance of growth companies cannot be overstated, as they play an essential role in creating jobs and boosting UK prosperity.

“ECI has experienced first hand the impact of the improving economy on growth businesses, with double-digit increases in revenue, profit and headcount across our portfolio, and three successful exits over the last twelve months.

“But plenty more can still be done. Many successful growth companies are sceptical about sources of finance. Investors like ourselves, the banks and public market investors need to work harder to explain the benefits and added value we can bring to these companies to help them maximise their potential.”