Some 40% of UK-based businesses say a transition period after the UK leaves the EU will enable them to make investment and recruitment decisions currently put on hold.
That is according to a study of companies by Lloyds Banking Group and London First, which reveals just 18% believe such a period would have a negative impact.
One to three years is the most desired length for a transition period, with 21% saying an agreement needs to be in place by the end of the year, and a further 22% believing the deadline should be June 2018.
"It's clear that a transition period is better for business than no deal," London First chief executive, Jasmine Whitbread, said. "Companies need to be able to see ahead to invest in and hire for the future, we can't afford to wait much longer."
The research involved a survey of over 1000 firms with annual turnovers above £1m, finding that 54% have put investment or recruitment on hold, revised their supply chains, or faced reduced demand, as a result of the Brexit vote.
Companies with an annual turnover of £750m or more were the most positive about a transition period, with 47% saying it would help their business, compared with 35% of SMEs.
Despite a significant number of firms stating their desire for such a period, 35% said that it would have no impact on their ability to make decisions and plan ahead.
However, most businesses want to see an arrangement that covers all the elements of the existing EU relationship, including freedom of goods, services, capital and talent, a common set of tariffs and EU legal arrangements.
"Firms feel a transition period will help them prepare for Brexit, and the sooner the UK and EU27 agree terms, the less uncertainty for businesses there will be," Lloyds Bank Commercial Banking managing director, Edward Thurman, said.
This comes after research from the Recruitment and Employment confederation (REC) last month showed that employers' plans to hire and invest had fallen to their lowest level for a year.
In addition, it was found that 31% of employers expect the economy to worsen and just 28% expect it to improve.
"The government must do more to create an environment where businesses have clarity. That means clearly laying out what Brexit plans look like," REC chief executive, Kevin Green, concluded.
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