SMEs feel that financing terms have gotten stricter
Company financing needs are more focused on working capital than ever before. According to a survey conducted this spring, the need for working capital has increased four percentage points. Particularly in the trade sector, investments are being put on hold, as only 10% of sector SMEs considering financing state that they intend to use the financing for investment purposes. Conversely, there are encouraging signs in industrial financing plans, as financing will be sought more frequently for expansion investments and development projects. This was revealed in this autumn's SME Barometer Survey.
The interest of extremely growth-oriented companies in outside financing has increased slightly. Over half of these intend on taking outside financing in the next 12 months. This represents an increase of 6 percentage points over the previous survey.
- "In Finland, there are still very few companies planning to take financing that state that they will use it for internationalising. We're worried about this, because, on the international export market, financing is one of the factors used in competing for orders, and there seems to be a much stronger internationalisation of SMEs in, for example, Sweden and Denmark. Our SME Export Finance Programme provides SMEs with information on these financing opportunities," explains Chief Executive Officer Pauli Heikkilä.
More self-financing required
According to the survey, the availability of financing has not, as a whole, become more difficult. However, over 40% of the Barometer Survey respondents which took financing feel that the credit policies of financing providers have gotten stricter and the financial market situation is reflected in financing terms either very much or quite a lot. In addition to tightening guarantee requirements and an increase in loan margins, companies seeking financing must also come up with an even higher percentage of self-financing. Regardless of the industry, nearly one out of every three companies stated that the requirements for self financing have gotten tougher.
- "Both in Finnvera's experience and according to the Survey results, there hasn't been any appreciable change in the availability of bank financing, despite stricter terms. However, for companies in weak financial condition, getting financing has become more difficult and the requirement for self-financing is much stricter. There are a lot of payment term arrangements being made," says Heikkilä.
The Federation of Finnish Enterprises, Finnvera and Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. The purpose of the survey is to examine the operations and financial operating environment of small and medium-sized enterprises. The autumn 2013 Barometer Survey is based on the responses submitted by over 5,300 SMEs.
Further information:
Chief Executive Officer Pauli Heikkilä, tel. +358 (0)29 460 2400
Communications Manager Kaisa Sailas, tel. +358 (0)29 460 2422
