Business owners “lacking confidence” they could survive a recession

The professional services company spoke to 501 business owners with revenues of £5m or more. Of these, 47% recognise there’s a likelihood they could default on their debt - with 15% believing this to be a “highly likely” prospect. 

Additionally, 52% think there’s a likelihood they could default on their debt - with 15% believing this could be highly likely. 

In order to mitigate their debt burden in the current climate, 23% of those spoken to have already refinanced their debt while a further 43% are considering taking this course of action. Alongside this, eight percent have ruled out taking on any additional debt as a way of minimising their debt burden as borrowing costs grow. 

An area that could be hit by this is the mergers and acquisition market, with one in five business owners (23%) having already postponed or pulled out of this activity, while 48% are considering doing so. On average, acquisitions have been postponed by just over two and a half years. 

However, while acquisitions have been paused, disposals are pressing ahead with companies divesting to streamline operations to reduce overheads and unlock capital, with 24% of business owners selling part of their firm in response, with a further 43% considering this. 

Meanwhile, those looking to sell their business altogether have postponed this by about two and a half years in anticipation of more favourable market conditions and valuation returning to higher levels. 

Alongside this, expansion plans are being impacted, with almost half (48%) of those spoken to believing they need to withdraw from a key market in response to the current climate. 

Additionally, those looking to expand outside of Europe have been delayed by more than two years, while those looking to move into the continent have been delayed by almost three years.