Almost a third of UK business managers believe banks are offering worse terms to fund acquisitions than at the start of the year, according to a survey commissioned by a private equity firm.

Bowmark Capital’s Optimism Index, which tracks how positive business leaders are about their companies’ prospects, also reported that 27 per cent of those questioned experienced tougher terms for raising funds against their fixed assets.

This has led to only a third of respondents planning to make acquisitions in the year ahead, compared to almost half in January.

However, most companies seem to have a strong financial base, with 98 per cent claiming to not be experiencing problems servicing their debt.

“With merger and acquisition activity likely to be muted in the year ahead, entrepreneurial companies will be focusing on organic growth,” Bowmark managing partner Charles Ind said.

It seems that with the price of debt rising, private equity is the funder of choice for several sectors, with 53 per cent of publishing and media companies, 50 per cent of healthcare firms, 40 per cent of business services and 36 per cent of travel and leisure groups surveyed having sold equity to grow their businesses.