Many business owners have a poor understanding of the role that private equity can play as a source of funds, according to financial services provider PricewaterhouseCoopers (PwC).
PwC released a report on private equity funding on Monday, after surveying 1000 businesses with an annual turnover of between $10 million and $100 million.
Of those businesses, 342 said they would be seeking funding for investment in the next 12 months, but only five per cent of those businesses said they would consider private equity as a source of capital.
Forty-one per cent of all respondents failed to agree that private equity provided cash to fund growth.
"The results reinforce what we see consistently - understanding of private equity among private businesses is low and misconceptions are high," PwC private clients partner Alan Elliott said in a statement.
He said four out of every 10 businesses believed that bringing in private equity would lead to a loss of control over the business.
"The truth is, under the right circumstance, the right type of private equity can be an accelerator of business growth or a facilitator of ownership change in the case of succession planning," Mr Elliott said.
"Private equity can be more flexible than other funding options and bring a network of talent and experience."
"It's more about a shared interest than a controlling interest."