CAMBRIDGE, England– Businesses in the North of England are more than twice as likely as those in the South to increase borrowing to fund growth, according to new research from Price Bailey, a Top 30 accountancy firm. The study found that 24% of businesses in the North plan to take on more debt, compared to just 11% in the South.
The survey, which gathered insights from 750 Finance Directors of companies with turnovers between £10m and £100m, examined growth strategies, projected sales volumes, and pricing trends. The full report is available [here].
Findings indicate a stark regional contrast in financing strategies. While businesses in the South are better positioned to fund growth through cash reserves or investor backing, those in the North are more reliant on borrowing—a costly option given the current high-interest rate environment.
Across the UK, the two most popular methods for funding expansion remain equity finance (52%) and cash reserves (49%). However, a significant portion of businesses are looking to reduce debt. The research found that 28% of finance directors expect their companies to borrow less over the next 12 months, compared to just 15% who anticipate increased borrowing.
Chand Chudasama, Partner in the Strategic Corporate Finance Team at Price Bailey, commented:
“UK businesses remain optimistic about growth prospects, but there is a clear regional divide in how that growth will be financed. Southern businesses generally have stronger balance sheets and greater access to investors, giving them more flexibility. In contrast, Northern businesses are more dependent on debt, which may limit expansion as borrowing remains expensive and operating costs continue to rise.”
He also highlighted a trend toward share buybacks, noting:
“Instead of reinvesting in growth, many businesses are using capital for share buybacks, returning value to shareholders rather than expanding operations. This could suggest a lack of confidence in the UK business environment, as shareholders seek to extract value rather than commit to long-term investment.”