Fears about the eurozone’s recovery are preventing businesses in the UK from investing, according to the Institute of Chartered Accountants in England and Wales.
It said that 55% of British firms are not seeking new finance in the next year.
Companies are also concerned about the impact any change in interest rates will bring.
These fears are inhibiting companies, especially small ones, from borrowing from banks, according to the accounting organisation, despite the growing indications that Britain’s economy is improving and signs that lenders are earning some trust again.
Trust between banks and small to medium businesses was severely dented during the financial meltdown. Now, the ICAEW found that 74% of businesses felt their bank understood their business, and the majority said their loan and overdraft facilities have been renewed.
The ICAEW implored small businesses to go on out there and get financing at to invest in the recovery to help make it sustainable.
On the other hand, once bitten, twice shy. Perhaps companies have no intention of again being driven to the brink by the behaviour of banks.
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