Almost a third (32%) of Midlands companies plan to reinvest at least 6% of turnover back into their business for commercial growth next year, according to research issued today by Yorkshire Bank.

However, 40 per cent of companies in the region said nothing had been earmarked for growth opportunities in the latest business survey from Yorkshire Bank.

The survey also found that just under half of businesses had delayed either salary increases (49%) or recruitment (44%) in the last 12 months because of the economic climate.

The areas most Midlands-based companies believe will drive commercial growth include more staff - which more than a third identify as the top priority along with new equipment and machinery (34%) and expanding their premises (32%).

Stephen Cronin, managing partner at Yorkshire Bank's Financial Solutions Centre in Temple Row, Birmingham, said: "From the research it is clear businesses are telling us that their investment and capital expenditure plans remain uncertain over the next 12 months.

"The decision of when and how much cash to invest back into a business is very important. These results indicate that the majority of businesses are planning a relatively conservative spend in the next 12 months. 

"However, with growing confidence among businesses, the time may well be right for them to invest for growth and pursue quality growth opportunities from bringing new products to market to pursuing potentially lucrative contracts."

Over a third of businesses in the region (42%) cited a lack of cash flow for delaying investment in the past year while 40% deemed the preservation of working capital and the perceived financial risk in the current climate (34%) as necessary reasons. 

Around 15 per cent of Midland businesses said a more flexible approach by their bank would allow their business to take advantage of growth opportunities in the next 12 months.

In response to customer demand, Yorkshire Bank recently launched a new business support initiative - Investing for Growth - to help successful businesses grow and develop by easing their cash flow pressures. The initiative, which follows the bank's October pledge to advance up to £10 billion of new lending over the next two years, offers both new and existing business customers a dedicated planning service and a more flexible approach to lending.

Loan repayment holidays, interest-only repayments as well as extended loan and credit facilities are just some of the flexible support options available under the Investing for Growth initiative which also includes a dedicated financial planning service. 

Stephen added: "From our extensive customer research, we believe there is a growing demand to give businesses the flexibility and confidence to grow, while still easing cash flow pressures and debt commitments.

"Investing for Growth has been developed to cater for what many businesses are looking for at the moment. While it won't suit every business, the opportunity to invest cash back into the company will be welcomed by good quality businesses which just need a bit more support in their corner."