North West manufacturing: Meeting the financial challenge
MANUFACTURERS are funding investment through their parent companies, balance sheets or by finding alternative sources of finance, research has shown.
That’s one of the conclusions to emerge from a new supplement looking at the manufacturing sector from TheBusinessDesk.com, in association with DLA Piper which has surveyed producers on their financial position.
Jonathan Watkins, head of corporate for DLA Piper in Manchester, said: “Despite the fact that undoubtedly finance remains hard to secure from banks in the current environment, particularly for smaller corporates, the research found that businesses are using their own balance sheets or alternative forms of funding for what they are looking to do rather than relying on conventional bank finance.
“Similarly our anecdotal evidence suggests that many businesses are not going to see their banks to seek finance unless absolutely required, opting instead for more steady organic growth and a desire to be more self-sufficient in the wake of the banking crisis.”
Some manufacturers appear to be cautious about approaching banks fearing that the inquiry could lead to a revision of their existing terms. They are also turning to alternative sources of finance such as invoice financing and export factoring.
Mark Riches, head of trade finance at Bibby Financial Services, said: “The fact that more and more business owners are looking at overseas opportunities to sustain and grow their businesses, despite uncertain economic times at home and abroad, goes to show that there are still opportunities for the taking.
“What is important now is that these firms are fully supported by the financial services industry, which should help ensure businesses are in a position to seize new opportunities and grow.”
