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
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