However, the good news is that there is every reason to start 2014 with an optimistic outlook for the year ahead.

So, what is the cause for such optimism? The economy has a lot to do with it. After strong second and third-quarter economic performance last year – and positive signs of further improvement for the fourth quarter – even the most cautious analysts are feeling optimistic. The Bank of England expects the UK economy to grow by 2.8 per cent during 2014, up from its previous forecast of 2.5 per cent; and both the CBI and the British Chambers of Commerce have raised their forecasts.

Risks remain, of course but overall, the mood has shifted. Growth is back on the agenda, and about time too. 

During the financial crisis and the recession, businesses were understandably cautious. Their focus on day-to-day survival fuelled a risk-averse culture in which planning for long-term growth was a lower priority than, for example, rigorous cost management or the preservation of cash balances.

Now, however, businesses are starting to look further ahead. They have begun to think about the opportunities that the upturn will create – and how to shape their organisations in order to capitalise on them.

Naturally many felt reluctant to commit funds to increasing capacity during the lean years of the economy and now as the recovery takes hold, these businesses may be finding that their current capital structure is not sufficient to cope with the rising demand for their products. Many UK businesses with growth ambitions now need fresh capital.

The perceived shortage of financing is something that many businesses fear. However there is encouraging evidence to show an increase in the availability of long-term capital now available for businesses that demonstrate strong growth potential. Research from UKFunders, taking a broad definition of growth capital, shows that more than 154 investments of between £2 million and £20 million were made in smaller and mid-sized UK companies in 2013, compared with just 66 similar investments in 2012 and fewer than 20 in 2011. This is good news.

In the space in which Business Growth Fund (BGF) operates – growth capital investments of between £2 million and £10 million for minority equity stakes in companies with a turnover typically ranging from £5 million to £100 million – there is further evidence to show that dynamic growth businesses are increasingly determined to capitalise on the opportunities of economic recovery and to seek the investment that they need to achieve this.

In December alone, BGF invested approximately £27 million in six separate mid-sized businesses with strong growth potential. The diversity of these businesses – based in locations ranging from the South-East of England to the North of Scotland and in sectors including retail, healthcare, media and manufacturing – underlines the breadth of entrepreneurial activity across the country.

More on December investments by BGF:

• Northern healthcare deal for BGF
• Cass Art inks investment from BGF
• Business Growth Fund backs Duncan & Todd

These are businesses that have recognised the advantages of accepting equity funding from an investor rather than merely defaulting to the debt markets, to which their predecessors would so often have turned due to its ready supply and established habit.

I strongly believe that long term and more flexible equity based investment is going to be a better and more appropriate way to build a successful business in today’s global environment. A well-capitalised company is far better placed to seize new opportunities such as acquisitions, to be pro-active, and equally to secure the sort of credit facilities that they need, compared to a business that is over reliant on short-term funding and excessive levels of debt.

And it’s not just about the money. The wider support that an equity investor brings is invaluable when a business is facing uncertainties or embracing change and growth for the first time in many years. A crucial part of our investment offer at BGF is the provision of advice and expertise through board representation, introduction to highly qualified non executive talent and access to an extensive professional network.

We now need more of the UK’s businesses to embrace the upturn and with it the latent opportunity; and to accept that now is a great time to invest. In fact delaying investment could prove the most costly decision of all as competitors across the globe raise their game.