The financing of Swiss businesses remains stable this autumn, according to the latest survey of 551 companies.
Given the ongoing global economic crisis, a telephone survey pertaining to the financing of small- and medium-sized enterprises (SMEs) was commissioned in April 2009 by the country’s State Secretariat for Economic Affairs (SECO), in collaboration with the Swiss Union of Arts and Trade, economiesuisse, and the Swiss Bankers Association.
The aim of this study was to gain a unique insight into the financing structure of the companies surveyed and to identify potential difficulties in obtaining bank credit.
In order to ascertain whether or not the financial needs of these businesses had evolved in the six months following the initial study, a second telephone survey of 551 selected companies was carried out recently. Of the 551 companies questioned, 79% had previously participated in the main survey in April, and either had some line of credit or banking credit.
Although all of the companies confirmed that they had a banking relationship at the time of the initial survey, only 8% declared that they no longer had ties to a bank six months later. Indeed, this was primarily shown to be the case for very small companies, able to find an alternative means of financing their business (through either an inheritance, private support, or via the sale of fixed assets).
Over the course of the last six months, funding requirements increased for 18% of SMEs, showing a slight decrease compared to the six previous months, when the figure was 23%. The overall trend nevertheless masks a sharp increase in the financing needs of companies consisting of one sole founder (47% in October compared to 28% in April).
Of those companies who have recently had recourse to external funds, 72% obtained all or part of the sum requested, 9% were refused funding, and 16% decided against requesting funding from either a bank or from other funding partners. Although the banks refusal rate has shown a slight increase, this has mainly been the case for either companies with one sole founder, or for companies who have registered a loss in turnover.
The requested finance related to either development or investment projects (for 49% of companies, compared to 68% in April), or to liquidity funding (for 34% of companies, of which 26% was due to late payment or debtor insolvency, compared to 26% in April).
Despite the fact that fewer companies (28%) expressed their belief that access to funding has become more difficult (compared with 45% in April), the proportion of companies registering a distinct toughening of the banks stance increased from 28% in April to 35%.
31% of the companies surveyed indicated a growth in turnover in the last quarter (compared to 22% in April).
The latest survey confirms that the financing of companies in Switzerland has hardly changed since the first survey was carried out in April. Overall, it appears that the economic climate and access to company funding has slightly improved, although the number of companies experiencing difficulties in obtaining credit has risen slightly as a result of a change in conditions.
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