The Road to the Biggest Leap: Why Medium‑Sized Businesses Keep Stalling
For the third straight year, lending to small and medium‑enterprise (SME) firms has been on the decline. A fresh study shows that just under two‑fifths of medium‑size businesses feel the pinch when it comes to raising the cash they need to grow into large enterprises.
Key Take‑aways
- 39% of companies find it hard to get investors on board, slowing their growth plans.
- 40% of business leaders report trouble borrowing from banks and other lenders.
- Sector‑specific pain spots:
- Property & construction: 45%
- Manufacturing: 44%
- Legal services: 62% face limited lending, and 77% are held back by high interest rates.
What the “Greatest Leap” Report Reveals
Conducted by the advisory firm Menzies and surveying 500 UK CEOs, MDs, COOs and founders of medium‑size and large businesses, the Greatest Leap study identifies raising capital as the biggest roadblock. The data paint a stark picture: nearly two in five businesses are stuck looking for the right kind of funding to make that seismic jump into the big league.
The Investor’s Seat is Still Hard to Find
“Getting the right backer—whether a VC, private equity or a savvy individual investor—is tough,” says Simon Massey, Managing Partner at Menzies. “While we see a slowdown, the real story is that many companies are missing out on opportunities they haven’t even thought about.” Massey points out:
- Private equity is often overlooked because of fears about losing control.
- When the right deal lines up, it can propel growth and bring valuable strategic expertise.
Bank Borrowing: Not Always the Answer
When it comes to banks, the hurdles are pretty similar:
- 40% of leaders say they either can’t secure a loan or get denied.
- Even when approved, 40% are turned off by the high cost of borrowing.
Legal services are hit hardest, with almost two‑thirds reporting limited access to credit and a halo of high interest chilling their expansion hopes.
What Should Companies Do?
Massey urges that growing businesses need a solid plan: a strong business model, a clear growth trajectory, and a capable management team. Only then can they appeal to lenders or investors, even when the economy is doing a bit of a crawl.
“If a company can show that it’s ready to scale, there will always be a lender or investor willing to back it up,” he says. “The key is to make sure everything lines up and you’re presenting the best possible version of your business.”
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