Information about businesses who sought additional finance, where the funds were sourced and reasons for not seeking additional finance.

External finance

36% of CEOs had sought additional (to internal cash flow) finance in the past two years. The figure was slightly higher for manufacturers than business services (38% versus 32%), and for small and medium-sized businesses than micro businesses (42% and 41% versus 31%). Of those who had sought additional finance, 73% had obtained all the finance they sought, but one in eight had gained none.


The overwhelming source of additional funds was from banks. 14% of those seeking funds had not approached banks, and half had obtained all their additional funds from them. Other sources of note were, in order, hire purchase or leasing firms – 19% approached – partners or working shareholders – 15% approached for loans and 14% for equity, and family – 11% approached for loans.


Of the two thirds who had not sought additional finance, the overwhelming reason given was that internal cash flows were sufficient (87%), followed by "unwilling to increase borrowing risk" (39%), "unwilling to dilute equity shareholding" (19%) and "cost of external finance too high" (17%).

Figure 9: Additional finance by growth aspiration and turnover growth



Almost half (46%) of the fast growth group had sought additional finance, compared with only one third of the moderate and non-growth businesses (see Figure 9). Industry innovators, too, were more likely to have sought additional finance – 43%, compared with 37% of firm-level innovators and 26% of non-innovators. Over half (55%) of those wishing to grow substantially had sought additional finance, declining to just 11% of those wishing to become smaller.

Box 3: What business success means to CEOs?
High fliers 
Growing, innovating and exporting businesses appear to forego today’s profit to grow or to meet their other business objectives. The very rapid growers effectively have a single-minded focus on serving customer needs. Employee training and formalisation of processes take second place, whereas those not growing so rapidly appear to have greater balance. There appears to be a difference in perceptions of success, between those actually growing rapidly and those wishing to grow substantially: the former place more emphasis on the means to satisfy customers’ expressed and unexpressed needs, and growth, to some extent, is a result of this.

Low fliers 
This same difference can be observed in businesses at the other end of the spectrum, where there is no growth, innovation or exports. Here the most profitable businesses also appear to focus on both customers and the needs to satisfy their expressed (not unexpressed) needs, while those who make less or no profit, do not focus on means.