New BDRC research has found that in 2017, over 65 per cent of small and medium sized businesses (SMEs) said they would not be happy borrowing money.

The research, which was comprised of 130,000 interviews, found that despite 42 per cent of businesses claiming they needed funds to undertake a business activity, almost 20 per cent of businesses would not utilise an opportunity if there were significant risks with debt.

In fact, as an alternative to borrowing, 29 per cent of owners and directors used some of their personal cash to fund their business.

Moreover, towards the end of 2017, just 27 per cent of small and medium sized businesses (SMEs) said that they had aspirations to expand their business and were prepared to take the risks, including borrowing money, to succeed.

Shiona Davies from BDRC said: “SMEs are as likely to think they would fund a business opportunity themselves as approach a bank for funding.

“For those who do apply for a loan or overdraft, success rates remain high. However, first time applicants’ success rates are currently lower than in 2015, albeit still higher than they were in 2012.

“Additionally, fewer SMEs who are not currently using finance show any appetite to do so.”

Over 80 per cent of funding applications and renewals have been successful over the past 18 months but not many SME business owners are happy to make use of the options available.

Despite this, 82 per cent of SMEs were profitable and almost half of SMEs reported growth in 2017.

The top three barriers for businesses remain legislation and regulation, political uncertainty and the current economic climate.