Nearly half of all owner-managed businesses in the West Midlands are feeling the pinch of restricted borrowing, according to a survey.
Those questioned said that finance and overdraft facilities were much harder to obtain compared with six months ago, while nearly 80 per cent said their business has been adversely affected by the turmoil of the credit crunch.
The bleak view from business owners was revealed in the annual survey of owner-managed businesses by the Birmingham and Tamworth offices of Haines Watts chartered accountants.
The findings make grim reading as the recession takes its toll on the West Midlands. More than 60 per cent of businesses surveyed said they were prepared for a major downturn in the economy and nearly 90 per cent did not believe the British economy will recover before 2010.
The knock-on effect of the recession means that 15 per cent of company owners believe they have no choice but to delay their retirement as the prospect of achieving a company sale in the current market has diminished and sale prices have significantly fallen.
Henry Briggs, senior partner at the Birmingham office of Haines Watts, said the gloomy results reveal how the recession is hitting family-owned businesses in the West Midlands.
He said: “The research shows the root problem for many smaller businesses is access to credit, with 40 per cent reporting that they have cashflow issues due to delayed payments from customers and the banks being unwilling to lend or extend overdrafts.
“The government needs to take on board the pleas for available finance because it is the oil that keeps the economy running more smoothly,” said Mr Briggs.
More than ten per cent of respondents said they had put a hold on corporate deals and 42 per cent concede they have had to reign in acquisitions.
“Despite the number of deals shrinking, it seems that more than 30 per cent o, companies surveyed have taken on the recession as a challenge, believing the key to weathering this storm is to diversify their offering in the market place.
“Developing new areas of business or expanding an existing niche has been identified by many business owners as the way to survive in this turbulent economic climate.”