RESEARCH by UK Steel Enterprise has shown that the minority of SMEs able to access equity funding grow faster than those backed solely by loan funding.
The findings come in the wake of the CBI's call for more companies to consider equity finance when looking for investment.
The CBI report "Slice of the Pie" highlighted the UK's over-reliance on traditional debt finance, saying that greater use of equity finance could help more firms to invest, grow and boost the UK economy.
UKSE has invested more than £22m in tailored financial packages for almost 1,500 businesses in the steel areas of Lanarkshire, Glasgow and North Ayrshire.
One of Scotland's longest-established business support organisations, the Tata Steel subsidiary has supported the creation of 17,000 jobs.
Anne Clyde, Regional Manager for UK Steel Enterprise, said: "Our report highlights that although only 3% of growing firms use equity finance, two-thirds of those who do use it report a positive experience. We echo that as we have found that equity finance can work really well for SMEs as well as larger companies."
UKSE can deliver investment and share packages worth up to £750,000.
Ms Clyde said: "It is also a myth that using equity finance results in a loss of control. UKSE is not here to run businesses and we never take a controlling interest but we are a source of support and advice.
"We would encourage companies to talk to their business advisers about equity finance as many growth projects stall when more traditional funding routes are exhausted."