Access to financing crucial for business in 2013
In an Access to Finance survey carried out by the NSO last year, 26 per cent of enterprises sought loan finance, with a success rate of 86 per cent.
In the Access to Finance survey, enterprises in selected economic activities were asked to provide details about their efforts in obtaining different types of finance: loan finance, equity finance and finance other than loan and equity.
In 2007, 30 per cent of surveyed enterprises applied for loan finance. In 2010 the corresponding figure declined to 26 per cent. Most sectors saw a drop in the number of loan finance applications between 2007 and 2010. In the Professional, Scientific and Technical services, 20 per cent of enterprises reported applying for loan finance in 2010 compared to 33 per cent in 2007.
The share of enterprises applying for equity finance edged up from 1 per cent in 2007 to 2 per cent in 2010, while for finance other than loan and equity, the share rose from 19 per cent to 21 per cent.
The owner/director was the guarantor in 86 per cent of cases in 2007 and in 94 per cent of cases in 2010, where a guarantee was required by the lender.
Of all enterprises surveyed, 48 per cent stated that the burden of obtaining finance had remained unchanged. A majority indicated that the general economic outlook deteriorated and 38 per cent reported the financial situation of the business had improved.
When asked about their outlook for the period up to 2013, 39 per cent of enterprises stated they would need financing. Of these, 54 per cent indicated that they would need financing to maintain their business as a going concern.
When requested to identify factors most likely to limit growth over this period, 80 per cent of enterprises indicated the economic outlook to be the main concern.