Finance for Small and Medium-Sized Enterprises - DTI Home Page
Finance for Small and Medium-Sized Enterprises - DTI Home Page
Finance for Small and Medium-Sized Enterprises - DTI Home Page
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<strong>Finance</strong> <strong>for</strong> <strong>Small</strong> <strong>and</strong> <strong>Medium</strong>-<strong>Sized</strong> <strong>Enterprises</strong>: A Report on the 2004 UK Survey of SME <strong>Finance</strong>s<br />
CONTENTS<br />
ACKNOWLEDGEMENTS 3<br />
FOREWORD (BY MIKE YOUNG – SMALL BUSINESS INVESTMENT<br />
TASKFORCE AND, FORMERLY, BANK OF ENGLAND)<br />
EXECUTIVE SUMMARY 5<br />
INTRODUCTION 23<br />
I. BACKGROUND<br />
1. ISSUES AFFECTING SME FINANCES<br />
1.1 Potential market failure in SME finance markets 27<br />
1.2 Other issues affecting SME finance markets 29<br />
2. CONTEXTUAL DATA ANALYSIS<br />
2.1 Business characteristics 32<br />
2.2 Principal owner characteristics 40<br />
2.3 External financial advice, managerial talents <strong>and</strong> business problems 42<br />
II. ANALYSIS OF THE DEMAND FOR AND SUPPLY OF SME<br />
FINANCIAL PRODUCTS<br />
3. USE OF EXTERNAL FINANCIAL PRODUCTS IN THE LAST 3 YEARS 52<br />
3.1 Friends <strong>and</strong> family finance 57<br />
4. NEW FINANCE SOUGHT IN THE LAST 3 YEARS 59<br />
4.1 Start-up finance 61<br />
5. REJECTION AND DISCOURAGEMENT 64<br />
5.1 Impacts of financial skills, <strong>and</strong> other business characteristics, on rejections 69<br />
6. PROVIDERS OF FINANCE 71<br />
6.1 Breadth of relationship with the main provider 76<br />
6.2 Length of relationship with main provider 79<br />
6.3 Price, customer satisfaction <strong>and</strong> the propensity to switch main provider 80<br />
4<br />
1