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Most SMEs 'invest with own cash'

NEARLY three-quarters of the owners of small and medium-sized enterprises (SMEs) in Scotland plan to fund investment using their own money, rather than seeking external finance, a survey has found.

The survey, published today by business funder Bibby Financial Services, also found that 69 per cent of Scottish SME owners were predicting "significant" growth in their businesses.

Bibby's SME Sentiment Scotland report found nine out of ten small and medium-sized firms were not looking for external funding in the immediate future, even though 54 per cent planned to invest in their business over the coming months.

Of those planning to invest, 72 per cent stated they would fund investment using their own money, rather than seeking external finance. Bibby cited its belief that Scottish SME owners' lack of appetite for external funding could weigh on these firms' growth prospects and ability to create jobs. Alan Anderson, Bibby's head of sales in Scotland, said: "Our research begs the question of why Scottish SMEs are not pro-actively seeking alternative forms of finance...The danger is that SMEs could actually be inhibiting their growth prospects and stifling jobs creation in the future by failing to investigate external finance now."

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