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NEARLY HALF OF GROWTH COMPANY CEOs FAULT BORROWERS FOR INADEQUATE BANK FINANCING, COOPERS & LYBRAND 'TRENDSETTER BAROMETER' REVEALS

 NEW YORK, Sept. 13 /PRNewswire/ -- According to the latest Coopers & Lybrand "Trendsetter Barometer" survey, nearly half (46 percent) of growth company CEOs place at least part of the blame on borrowers such as themselves for the inability of their peers to secure adequate bank financing. Almost three in ten (29 percent) fault the borrowers alone, whereas 17 percent share the blame with the banks. Overall, 49 percent place the entire blame, and two-thirds, (66 percent) place at least part of it, on the banks. The remaining 5 percent are not sure.
 According to George Auxier, national director of Entrepreneurial Advisory Services for Coopers & Lybrand, the international professional services firm, "It is surprising to hear borrowers acknowledge their responsibility for difficulties in securing funding. Those entrepreneurs who point the finger at borrowers cite poor business management, lack of a track record of profitability, and inadequate business plans as the primary reasons.
 "As would be expected, however, two in three growth company CEOs place at least a portion of the responsibility for inadequate bank financing on the shoulders of the bankers," Auxier continued. "They cite key factors such as cautious bank attitudes (28 percent), strictness of federal banking standards (16 percent), and conservative bank policies (14 percent)."
 The amount of already existing debt is a factor in the ability to secure additional financing, explains Auxier, adding that the banking community often uses a 30 percent ratio of debt to total capital as a cut-off point.
 "Debt represents 26 percent of capital for `Trendsetter Barometer' growth companies as a group," he said. "Of the CEOs interviewed, 56 percent were below the 30 percent threshold, whereas 37 percent exceeded it and the remaining 7 percent did not report. These numbers indicate that the majority have good potential for borrowing in the near future."
 Growth company borrowers in the past quarter averaged a 32 percent debt-to-capital ratio, suggesting a modest degree of flexibility in the banking community, "Trendsetter Barometer" found. Those turned down for bank financing during the quarter averaged a 40 percent debt-to-capital ratio, whereas non-borrowers averaged a 23 percent ratio.
 "Trendsetter" found that product companies have a higher proportion of debt than service firms -- 30 percent compared to 21 percent.
 "Product companies may have more debt because they have more tangible assets for collateral than service firms, thereby making it harder for the latter to secure loans," explained Auxier.
 "Trendsetter" found similar debt proportions across all company size groups. However, the fastest growing companies surveyed -- those with growth rates higher than 20 percent -- had notably lower debt-to-capital ratios than slower growth companies: 23 percent compared to 30 percent. "This suggests that the fastest growing firms have the best debt profiles and are the strongest candidates for increased borrowing," explained Auxier.
 Coopers & Lybrand's "Trendsetter Barometer" is developed and compiled by the firm's Entrepreneurial Advisory Services group with assistance from the opinion and economic research firm of Business Science International. At each Coopers & Lybrand office, an Entrepreneurial Advisory Services team is available to serve the needs of growing and mid-size companies.
 One of the world's leading professional firms, Coopers & Lybrand provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in offices located in 100 U.S. cities and more than 66,000 people in 120 countries worldwide.
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 /NOTE TO EDITORS: Graphic art available upon request. Coopers & Lybrand's "Trendsetter Barometer" interviewed CEOs of 392 product and service companies identified in the media as the fastest growing U.S. businesses over the past five years. The surveyed companies range in size from approximately $1 million to $50 million in revenue/sales.
 /CONTACT: Maggie O'Donovan Bolton of Coopers & Lybrand, 212-536-3174/


CO: Coopers & Lybrand ST: New York IN: FIN SU:

SH-PS -- NY022 -- 1203 09/13/93 10:25 EDT
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Date:Sep 13, 1993
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