MORE than half of the region's businesses will seek finance to fund growth plans over the next two years, researchers have found.

A survey of North-East companies found 56 per cent would be looking for business funding before 2007, compared to the national average of 50 per cent.

The study, by the Institute of Chartered Accountants in England and Wales (ICAEW), also found that one in three respondents in the region favoured debt finance, while 21 per cent preferred a combination of debt and equity.

Keith Proudfoot, the ICAEW's regional manager, said: "As we start 2005, it is encouraging that North-East entrepreneurs are looking to invest in their businesses to unlock their growth potential in the next two years."

Respondents said their average debt finance requirement over the next two years would be £2.38m, compared to £2.92m nationally.

Equity funding for businesses in the North-East is expected to average £3.98m, higher than the average for the UK of £3.33m.

Nearly seven out of ten were likely to use asset-based finance, compared to 47 per cent nationally, the survey found.