Private equity is expected to increase its investment into turnaround deals and restructuring as banks continue to reduce lending levels.
According to research conducted by law firm Gateley, which surveyed over 125 professionals, 91 per cent of respondents felt that alternative sources of finance will overtake traditional forms of lending.
Almost three-quarters of those surveyed believe that reduced activity from typical lenders, such as high street banks, will pose a significant challenge for business. This is in stark contrast to last year's results, where 94 per cent of respondents believed that bank funding would increase to meet higher levels of demand.
The respondents were divided on the number of potential restructuring deals that will take place in the next 12 months, with 45 per cent believing there will be fewer. The majority of those surveyed – 73 per cent – said that more innovation is needed to successfully navigate the market over the coming months.
Andrew Buchanan, corporate restructuring partner at Gateley, said: "As the economic landscape continues to pose difficult questions, across a variety of sectors, turnaround specialists must ensure they react and respond appropriately to help secure the future prosperity of the regional business community."
The survey also found that retail, leisure, healthcare and commercial property are the sectors most likely to be involved in restructuring deals over the next two years.