The Finance Flow: Growth concerns remain for mid-market

MID-MARKET firms believe the worst of the recession may be over but many now have concerns about funding options to sustain growth, Grant Thornton’s new Finance Flow report concludes.

This week, TheBusinessDesk.com, in association with Grant Thornton, is looking at how the flow of finance is likely to affect the growth plans of the vital mid-market sector.

The report concludes growth strategies within the key sector are being revised and aggressive M&A policies are likely to be traded in favour of organic growth which while less spectacular, is nevertheless safer.

However, certain sectors are more optimistic than others. The report concludes healthcare businesses together with those operating in the technology, media and telecoms (TMT) niches are likely to be more optimistic about their growth prospects.

To read more about the flow of finance into the mid-market sector download a free copy of Grant Thornton The Finance Flow Supplement

Automotive and aerospace companies are also positive although the same cannot be said for the chemicals and industrials sector, which is split down the middle about its growth prospects.

Firms in the business support sector and those in retail are thought to be the least optimistic about their growth prospects – and also the chances of persuading a bank to lend to them.

Ian Wilson, corporate finance partner, Grant Thornton in Birmingham, said the situation was frustrating many firms and indicated why predictions were difficult to make.

“There is a clear desire among mid-market businesses to return to growth but funding and perhaps confidence, are still lacking,” he said.

David Ascott, partner, corporate finance, Grant Thornton, said: “The findings of this year’s report present a fascinating, if somewhat complex, picture for the UK’s mid-market: there is growing optimism that the financing environment is improving and businesses are keen to get back onto a growth track.

“But the banks are still not opening the funding taps, and so more aggressive growth strategies remain on hold.

“The mid-market looks to be digging in for the long haul.”

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