Finance for Small and Medium-Sized Enterprises - DTI Home Page

Finance for Small and Medium-Sized Enterprises: A Report on the 2004 UK Survey of SME Finances
• 11% of businesses, rejected for term loans, a ccessed a SFLG loan versus
3% of businesses with no such
rejections.
• 6% of start-ups accessed SF LG loans versus 4% of established firms.
A tentative conclusion
from these results is that younger businesses, with fewer
assets, and which have been denied other loans, are more likely to access
SFLG loans.
On this evidence SFLG loans are reaching the types of business for which they are
intended.
Overdrafts
Analysis of th e data on overdrafts revealed the following information:
• The average amount overdrawn is just over £21,000 (±£9,000).
• In total, SMEs owe about £12 billion in overdrafts.
(see Table
A8.3)
Fo r comparison with data collected by the British Banker’s Assoc iation (BBA), we
lo oked at overdrafts among businesses with a turnover of £1 million or less. These
results show
that:
• The average amount overdrawn
is just over £14,000.
• In total, th ese businesses owe
about £7 billion in overdrafts.
BBA data estimates that businesses, with a turnover of £1 million or less, owed about
£9 billion in overdrafts in the last quarter
of 2003. SMEF data estimates the total
a mount outstanding on term loans and overdrafts
is about £41.5
billion;
the
corresponding BBA estimate, for the last quarter
o f 2003, is £38.9 billion.
Table A8.3 also indicates that:
• The a verage secured overdraft limit is £83,000. These overdrafts account
for 27% of all overdraf ts.
• The average unsecured overdraft limit is just under £20,000. These
overdrafts
account for 7 0%
of all overdrafts.
• Ethnic
minority owned businesses have significantly lower overdraft limits
than white owned businesses (£18,000 versus £35,000).
• Start ups have significantly lower overdraft
limits than established firms
(£7,000 versu s £35,000).
The following chart shows the main
purposes for using an overdraft
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