Franchise Finance: Business of Recovery
Cathryn Hayes - HSBC Head of Franchising
A new HSBC report undertaken by Delta Economics, reveals that UK companies are emerging leaner and fitter from the recession but could endanger their own recovery by not seeking new finance. This obviously has implications for franchise businesses across the UK many of which rely upon the availability of financing for new franchisees in order to expand their network.
The report, called Business of Recovery, takes into account the input from 2,100 SMEs and 30 business and economic experts.
The report indicates that:
- Today’s businesses risk taking too short term a view and being too self-financing, with just 15% of UK-based companies currently seeking external investment
- Businesses need to be talking to their financial providers now to plan their approach to funding and finance. This will enable them to make the most of domestic and international opportunities as we recover from the effects of the recession
- If companies hold off from investing for too long they could miss out on opportunities to grow as the economy recovers
- 2% of businesses believe access to finance will be a key challenge in 2010, but 85% are not currently seeking external finance
- 80% of businesses said they “don’t need money” because they’re tightening their belts and running down their own resources, or financing themselves (53%). Just 17% said they weren’t seeking finance because “banks weren’t lending”
Noel Quinn, Head of Commercial Banking, UK said that as confidence returns, UK businesses should start taking a more long term view. He said: “I’ve met some very impressive companies recently who are driving their business forward and we’ve been working with them to get their finances right to allow them to grow. But, overall, we are still experiencing a lack of demand for finance from businesses, despite having made funds available. We believe that now is the time for companies to revisit financial plans and consider using different types of finance for the future.”
Noel added that more UK companies are looking beyond the UK domestic market to identify opportunities for growth through international trade.
A special 6 minute film, called ‘Business of Recovery hints and tips from business experts,’ is available on our Business Network site. The film features independent experts and customers providing practical advice and best practice on planning ahead and cash-flow management.
If you would like a copy of the report please email franchiseunit@hsbc.com.
Tags: business growth, cathryn hayes, franchise, Franchise Finance, recession
