The SME Finance Monitor: Applying for external finance

The SME Finance Monitor, undertaken by BDRC Continental, looks at how SMEs are thinking on key financial issues and the business environment.

The survey was initially set up by the Business Finance Taskforce and examines how SMEs have applied for external finance, what their experience was and what stopped those who did not.

Around 37 per cent of SMEs were using external finance in the last quarter of 2016. Overall levels of finance remained in line with 2015, but below levels previously seen in 2012 when 44 per cent were using external finance.

The larger the SME the more likely they were to use external finance in 2016. For SMEs that did not have employees only 33 per cent used external finance, while this increased to 64 per cent to those SMEs with 50-249 employees.

Around 71 per cent agreed that they would accept a slower growth rate they funded themselves rather than borrow to grow more quickly, with levels of agreement declining with size of business.

Concerns about the economic and political climate increased amongst SMEs who traded internationally. Worries about the economic climate increased from 17 per cent in 2015 to 35 per cent in the last quarter of 2016, while concerns about political uncertainty increased from 8 per cent to 32 per cent in the same period.

There were 14 per cent of SMEs in the last quarter of 2016 that expected to be future would-be seekers of finance. This changed very little over the recent quarters, but remained lower than seen in previous years in 2012 where 23 per cent of SMEs were future would-be seekers.

This article was published in our Business Reporter Online: SMEs.


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