ACCESS to long-term funding is preventing medium-sized businesses across the South West from growing to their full potential, according to a new report.

The Confederation of British Industry (CBI) has released a report alongside business advisory firm BDO LLP, which states businesses rely predominantly on short-term funding.

It claims that, as a result of a rise in lending from banks, there has been evidence of huge growth with many firms proving to be on the up.

But the availability of long-term growth captial still remains a barrier for many, with more than half of MSBs - defined as having an annual turnover of £10 million-£100 million - finding it hard to access loans for longer than a five year period.

The CBI and BDO want the Government to offer tax incentives and provide equity investments to help firms expand.

Deborah Waddell, CBI regional director in the South West, said: “Building up a British ‘Mittelstand’ of successful medium-sized businesses is mission critical to our economic future. A key part of unlocking their enormous potential is for the Government to fix the funding ladder, filling in the gaps in the supply of long-term finance that the South West’s brightest growing firms need to succeed.”

Laura Shaw, a partner at BDO, added: “Medium-sized firms lack diversity in long-term funding sources; yet it is the mid-market that is fundamental to creating a balanced and sustainable economy.

“Those scaling up are often investing in innovation, new markets and in boosting their production capacity, all of which needed to be funded with long-term capital. We are not trying to reinvent the wheel. Instead we’re suggesting an innovative adaptation of existing channels.”