The economic outlook that currently exists is resulting in a reluctance among the top 100 small and medium sized enterprises in Yorkshire to borrow any more business finance.
Having a strong balance sheet is seen as an important part of financial management for businesses in these times.
Fifty-one of the entrants in 2012 have no debt and are operating cash-positively, compared to 2011?s 53 companies.
Additionally, 45 firms have a figure of between ?0 and ?10mn of debt ? which is two more than last year ? and two firms have debt over ?10mn, which is the same figure as last year.
Both firms have are involved in the same field.
Thirty-two from the 49 firms in a position of net debt have gearing under 100 per cent ? the same figure as in the survey from 2011.
Additionally, 17 firms in the 2012 survey have greater gearing than 100 per cent compared to last year?s 14 companies.
In the debt financing sector, asset-based lending has been heavily promoted by banks recently ? private invoice discounting, in particular.
This is emphasised by the fact that 66 per cent of firms with a requirement for working capital work with CID ? compared to 60 per cent last year.
The research?s results reveal a very similar scenario to last year.
The top SMEs in the region are not taking out more debt and maintain operations with low gearing levels.
Due to the strong financial stance, the SMEs that are the most profitable ensure they are positioned well enough to benefit from any opportunities as and when they arise.
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Source: http://www.psfinance.co.uk/firms-reluctant-to-increase-debt-1474.html
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