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Preliminary data shows that growth in commercial and industrial lending decelerated for the first time in a year and a half. Banks that have reported continued momentum said that gains have come from signing up new customers and taking market share, but that overall credit demand remains tepid.
April 3
Fewer midmarket companies are expecting to seek financing this year as balance sheets have become stronger, according to a new report from Deloitte.
More than a quarter of the executives who responded to Deloitte’s Mid-Market Perspectives survey said they were not planning on securing external financing this year, compared with 14% last year. Only 7% of privately held companies said they would consider going public in the next year.
About 35% of respondents predicted cash balances to rise while 10% expected them to fall, Deloitte said Monday. Over half of participants expected profits to rise while 11% predicted a decline.
Last year 38% of companies, compared to 23% this year, said they would borrow to fund U.S. business expansion. For 2012, 16% of companies, compared with 25% last year, said they would borrow to finance domestic acquisitions.
The consulting firm said that the drop in demand for external financing may not mean more modest expansion plans. Instead companies may use internal, rather than external sources, for funding growth, the report concluded.
Of all the sources of funding, the greatest number of respondents said access to internal financing was unchanged. Internal financing was also second to last in number of respondents saying it had become more difficult to obtain.
The survey included responses from 528 senior executives at companies with annual revenues between $50 million and $1 billion. OnResearch, a market research firm, conducted the survey for Deloitte. Of the companies surveyed, 23% were public and 77% were privately held.
