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

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Finance for Small and Medium-Sized Enterprises: A Report on the 2004 UK Survey of SME Finances Figure 3.1: Percentage of Businesses Using Various Types of Financial Products 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Credit Cards Overdrafts Asset Finance Term Loans Grants Asset-Based Finance Equity finance Figur e 3. 1a: Percentage of Businesses Using Various Types of Financial Products (by turnover) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% < £10K £10-£49K £50-£99K £100- £249K Turnover £250- £499K £500- £999K £1-£4.9m £5m or more Credit Cards Overdrafts Asset Finance Term Loans Grants Asset-Based Finance Equity Finance 53
Finance for Small and Medium-Sized Enterprises: A Report on the 2004 UK Survey of SME Finances Figure 3.1b: Percentage of Businesses Using Various Types of Financial Products (by number of employees) 85% 80% 75% 70% 65% 60% 55% Credit Cards 50% Overdrafts 45% Asset Finance Term Loans 40% Grants 35% Asset-Based Finance 30% Equity Finance 25% 20% 15% 10% 5% 0% 0 1-9 10-49 50-249 Number of Employees Figure 3.1 shows the following patterns of financial product use (with the amounts used, drawn from later sections of the report, presented to set this use in context): • Just under 2 million businesses (53% of SMEs) use an overdraft − The total amount owed in overdrafts is £12 billion (see Section 8). • A similar number use personal or business credit cards (55%) − Businesses spend £450 million per month on personal credit cards − Expenditure on business credit cards is £1.4 billion per month (Section 11). • About 900,000 businesses use term loans (24%) − The total amount outstanding on term loans is £64 billion (S ection 8). • A simil ar number use leasing and/or hire -purchase (27% ) − The total monthly repayments on leasing/hire-purchase are £ 2 billion. er of ) in the last 3 years is £7.6 billion. e is used by about 100,000 businesses (3%) ents £8 billion in monthly advances (see Section 10). 25 • Grants are used by just under a quart a million businesses (6% − The total amount of grants accessed • Invoice financ − This repres • About the same number use equity finance (3%; 100,000 businesses) − This represents £14.3 billion in total investment in the last 3 years (subject to a wide error margin: see Section 12). 25 An important finding of our pilot survey, conducted 2 months before the main fieldwork in June 2004, was that businesses found it difficult to report the amount left to pay on their leasing/ hirepurchase agreements. Accordingly, in the main survey, the question on the amount of leasing/hirepurchase used was re-phrased in terms of monthly repayments (a concept that businesses were more familiar with). 54
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