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12° Nicosia,
27 May, 2024
 

Businesses turn to banks amid funding crunch

High prices, tight loans dent business bottom lines

Newsroom

In 2023, businesses encountered a tough road ahead when it came to securing loans, as costs continued to climb. This led many to rethink their financial priorities, with traditional bank loans falling lower on the list. Meanwhile, banks remained cautious, hesitant to relax their lending requirements.

As the new year rolled in, there was a glimmer of hope on the horizon. The outlook for 2024 showed some promise, with funding options improving slightly in the early months. However, the cost of borrowing still remained high, posing a challenge for businesses looking to invest and expand.

Despite the slight improvement, businesses recognized the limited alternatives beyond traditional bank loans, citing ongoing economic uncertainties. All eyes remained on banks, with hopes that they would offer more favorable terms as conditions evolved.

On the revenue front, businesses faced declining profits as consumer spending remained subdued, with high prices prompting consumers to tighten their belts. This trend was evident in the previous period's turnover, which saw a surge followed by a subsequent decline in the first quarter of 2024.

Looking ahead, there was cautious optimism about stabilizing prices and wages, aiming for modest increases in line with general inflation. Insights from a pan-European survey highlighted the crucial role of businesses in influencing monetary policies, providing valuable guidance for policymakers.

While the road ahead may be challenging, businesses remain resilient, adapting to changing economic conditions and seeking opportunities for growth and development.

TAGS
Cyprus  |  economy  |  banks

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