More than 40 per cent of firms in the West Midlands plan to seek funding for business growth during the next 12 months – but many are concerned their request for bank lending will be turned down.

Meanwhile, nearly one in five (17 per cent) say cash-flow is crippling their businesses as the lending squeeze continues to cause headaches for some firms.

The quarterly Close Brothers Business Barometer, which canvasses the opinion of SME owners from a variety of sectors across the UK, further revealed that many business owners are unsure as to how to fund plans for growth.

A total of 43 per cent of business owners surveyed in the West Midlands admit their knowledge of funding sources other than the conventional could be better, whilst a further 11 per cent are completely unaware of any alternatives to bank lending.

CEO of Close Brothers Asset Finance, Mike Randall said: “It is encouraging to see that so many firms in the West Midlands have plans to invest in their business, but to make these plans a reality firms need to have the necessary working capital required for growth.

“For many, accessing finance can seem like a daunting task if they perceive that banks aren’t willing to lend and applications are likely to be turned down.

“However, our findings would seem to suggest that firms are not being proactive enough when it comes to financial planning and many are failing to seek appropriate alternatives to bank lending.”

The Business Barometer highlighted that access to cash remains a major challenge for many businesses in the region; with 17 per cent of local business owners surveyed claiming it is crippling their business.

Mr Randall added: “We would urge businesses to widen their search and consider other means of funding to help them achieve their potential.

“Business owners need to explore the broad range of financial solutions available to them.

“Over the last few years, asset finance has become increasingly popular, however there is still a lack of awareness surrounding it that may be holding firms in the West Midlands back from realising their growth aspirations.

“Asset finance is a flexible form of funding that allows firms to unlock the capital tied up in their assets.”