More than a third of SMEs avoid borrowing at all costs, despite 67% having had to in the past 12 months, research has found.

The study, conducted by Hitachi Capital Invoice Finance with 502 SMEs, revealed that only 15% of business owners trust traditional lenders, with those London and Northern Ireland the most and least trusting respectively.

Half of the interviewees said they wanted their company to owe as little as possible to outsiders. Though cash flows are among their top concerns (Brexit being at the top), 36% would rather invest personal savings than rely on borrowing, and 80% have already done so.

Andy Dodd, Hitachi Capital Invoice Finance’s managing director, said: “It’s interesting to see business owners remaining cautious with regards to business funding, potentially restricting their ability to grow.”

He added: “It is important for business owners of any kind to be aware of the funding options available to them and what they are eligible for, as there are a number of options available to help prioritise overdue payments and maintain financial resource, particularly outside traditional lenders.”

The most cited reasons for distrust in lenders, in order, are a bank’s reputation, previous bad experiences as a business or a person, and security. About 10% said their past borrowing experiences had merely resulted in further debt.

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The research also highlighted a generational gap, with younger businesses and their owners being more trustful of lending than established enterprises.