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 NEW YORK, Aug. 16 /PRNewswire/ -- America's fastest growing companies reported an upward surge in bank loans during the second quarter, according to Coopers & Lybrand's latest "Trendsetter Barometer" survey. During this period 37 percent of growth company CEOs obtained or increased bank loans, a gain of 19 percent over the 30 to 31 percent levels reported in the three previous quarters. These entrepreneurs increased both secured and unsecured bank loans, with unsecured loans now accounting for half of their recent bank financings.
 Only 8 percent of the respondents who applied for financing failed to achieve loans during the quarter, compared to 10 percent in the first quarter.
 One-third (32 percent) of the fast growth companies surveyed also increased their corporate credit availability in the second quarter, according to survey results.
 "Available credit increased to 14.3 percent of current revenue levels, indicating that 15 percent more funding was available in the second quarter," said George Auxier, national director of Entrepreneurial Advisory Services for Coopers & Lybrand, the international professional services firm. "This additional funding should help these borrowers to achieve their expected revenue growth of 25.4 percent in 1993.
 Small Firms Still Have Financing Problems
 Smaller growth companies were less successful in increasing or obtaining financing than their larger counterparts during the second quarter. Only 29 percent of businesses with fewer than 50 employees increased their bank financing, compared to 43 percent of those with 50 or more employees. The turndown rate for smaller firms was twice that of larger firms: 12 percent compared to 6 percent.
 Smaller growth companies also failed to match their larger counterparts in increases in credit availability: 25 percent secured increases, compared to 37 percent of larger firms.
 "These are clear indictors that bank financing is still a major issue for growth companies," said Auxier, "but the activity for larger growth firms may pave the way for more lending to the smaller ones."
 Low Interest Rates Spur Bank Financing
 Fast growth companies paid relatively low interest rates in the second quarter: an average 7.36 percent rate, or 136 basis points above prime. This rate is 50 basis points lower than a year ago when prime was 6.50 percent, although the "spread" remains the same.
 While most new bank financing was obtained under existing spreads at advantageous interest rates of 7.25 percent, the one in four companies that negotiated new rates in the second quarter paid a premium: 7.70 percent interest, or 34 basis points above the average for all "Trendsetter" companies.
 Recent Borrowers More Aggressive
 Recent borrowers reported more aggressive investment plans than non-borrowers during the second quarter. For example, 60 percent of recent borrowers are planning a major investment of capital over the next twelve months, compared with 49 percent of non-borrowers, a difference of 22 percent. Moreover, recent borrowers expect to spend up to 14 percent of revenue on these major investments, compared with non-borrowers, who anticipate spending only 11 percent.
 "Borrowers also plan more increased investments for facilities expansion, geographic expansion and business acquisitions than non-borrowers," Auxier noted.
 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 midsize companies.
 One of the world's leading professional services 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 100 U.S. offices and more than 66,000 people in 120 countries worldwide.
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 /NOTE TO EDITOR: 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.
 Graphic art available upon request/
 /CONTACT: Maggie O'Donovan of Coopers & Lybrand, 212-536-3174/

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

TS-MP -- NY048 -- 3013 08/16/93 11:05 EDT
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Publication:PR Newswire
Date:Aug 16, 1993

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