VCT managers say bank lending problematic in 2013

Venture capital trust managers have said raising capital will be a key challenge for the companies they invest in, while 44 per cent said this had already proved an issue in the past 12 months.

VCTs tend to invest in unlisted companies which need start-up or expansion capital. Managers reported to the Association of Investment Companies (AIC) that smaller and struggling companies were particularly affected by the banks’ reluctance to lend.

Bill Nixon, managing partner at Maven Capital Partners, said: “Things have remained pretty much the same over the past 12 months i.e. while banks are willing to lend to larger, profitable businesses, finance for smaller or less profitable companies remains very difficult to access.

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“For businesses which require additional finance to restructure or deal with a dip in performance, the process associated with securing bank support can be lengthy and expensive, if further finance is available at all.”

Managers were divided over the health of Britain’s finances. Of those polled, 45 per cent said companies were approaching growth cautiously and the same amount said they expected the economy to improve.