Agenda Packets - 1995/12/04 - Laserfiche WebLink

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Working Capital 15% Capital Equipment 12% Facility Financing 9% Inventory Financing 8% New Product Development 3% Other 3% Interest in financing for varying purposes varied by the sector of firms,their relative growth profile, base building characteristics and other characteristics. Twenty-siT tlisted_additionaLcapital asa.hi gb nriority„while22 percentlisie_dit_as a-low priority. Demand for additional capital increased at the $1 million in sales mark. Wholesale/distribution firms were most interested in additional capital. Priority for additional capital was most pronounced in the machinery cluster and among minority owned firms. Firms engaged in international sales were among those most interested in additional capital, followed by those in the 1-25 percent base building range. Most firms relied on banks within the North Metro for their bank deposits. This was distinctly less true as firms increased in size. High growth firms and those with extensive sales out of the area were the most likely to use outside depositories. Financing was even less likely to be based in the North Metro,with size again being a major indicator. Manufacturing, wholesale/distribution, TCPU, FIRE and retail were less likely to rely on local banks for financing. In some categories,up to 20 percent of firms rely on financing sources from outside the Twin Cities area. On the one hand this may be good in that it demonstrates the capacity of local firms to draw dollars in from outside the area. On the other hand, it may indicate a set of institutional constraints on the local economy, and or local market niches that are not being adequately served by local financial institutions. The net result of which may be a hindering of local economic growth. One hundred forty-one firms indicated dissatisfaction with local banks and/or capital services. The manufacturing sector and machinery cluster, in particular, were among the most concerned. Finns with international sales and those with high base building characteristics were also more likely than others to express dissatisfaction. Firm size did not appear to be a determinant of dissatisfaction. Firms with$5-15 million in sales were proportionately the least satisfied. While relatively few in number these levels of dissatisfaction suggest that all is not rosy in the regions banking infrastructure. Nearly 500 firms indicated that they felt their banks were not responsive to their needs. This equates to roughly 18 percent of the entire study. Construction firms, wholesalers, manufacturers, and TCPU firms were more likely to suggest unresponsiveness. With the exception of the largest and smallest of firms these feeling of unresponsiveness was fairly 15