Quarterly Bulletin
Small Firms Articles
| Summer 2004 | The
financing of smaller quoted companies: a survey 
(119k)(by Peter Brierley and Mike Young of the Bank's Financial Stability Area). This article summarises the results of a survey on the financing of smaller quoted companies (SQCs) conducted in February and March 2004 and builds on earlier work by the Bank and other organisations. It explores SQCs' recent and possible future use of external finance, their views on the availability of debt and equity finance and their views on possible constraints on such finance that are thought to be particularly relevant to SQCs. The results suggest that most SQCs are not currently experiencing any major difficulties in accessing either debt or equity finance. |
| Summer 2003 | Asset
finance
(84k) (by Andrew Hewitt of the Bank's Domestic Finance Division). Asset finance, in its various forms, is widely used in the United Kingdom. Indeed, one survey has shown it is the largest type of funding for almost a quarter of those small and medium-sized enterprises (SMEs) that use external finance. Some forms of asset finance have grown rapidly in recent years, while others have not; and some new asset finance products have been brought in from the United States. This article provides an overview of asset finance from a UK perspective. |
| Spring 2002 | Provision
of finance to smaller quoted companies: some evidence from
survey responses and liaison meetings
(67k) (by Allan Kearns and John Young of the Bank's Domestic Finance Division). This article reports on some recent work by the Bank aimed at improving our knowledge of the smaller quoted companies (SQCs) sector. This has taken two forms: first, analysis of the results of a questionnaire survey of SQCs drawn from a sample of CBI members; and second, a series of liaison meetings with selected companies outside the sample. Our inquiries suggest that, by reasons of their size, SQCs do not generally have access to bond markets, and that banks are less willing to extend them long-term loans, except on a secured basis. However, we found no evidence of any general problem with access to debt finance. A large majority of firms are able to achieve desired levels of gearing and use a wide variety of debt instruments and derivative products. |
| Spring 2001 | The
financing of technology-based small firms: a review of the
literature
(143k) This review assesses the academic literature of recent years on the financing issues faced by technology-based small firms (TBSFs). It was produced as part of the latest report on these firms by the Bank's Domestic Finance Division, published last month. This report finds that, while there may still be market weaknesses in the provision of relatively small amounts of risk capital to TBSFs at the start-up and early stages, these appear to be less than four or five years ago, and to impact on TBSFs less than was the case then. Peter Brierley, Head of Domestic Finance Division, explains why the literature suggests that market imperfections in the provision of finance to small companies may apply with particular force to the start-up and early-stage financing of TBSFs, but concludes that there is little compelling evidence of a major market failure. Technology-based small firms (TBSFs) are generally defined either as businesses whose products or services depend largely on the application of scientific or technological knowledge, or as businesses whose activities embrace a significant technology component as a major source of competitive advantage. These businesses are generally located in industries such as communications, IT, computing, biotechnology, electronics and medical/life sciences. Earlier work at the Bank suggested that there might be some inefficiencies in the market for financing TBSFs, especially at the start-up and early stages of finance. Recent official enquiries in this area have focused in particular on possible barriers that high-tech companies in the United Kingdom might face in attracting finance. The profile of this work has been enhanced by the current Government's desire to encourage 'entrepreneurship', by growing interest in the 'new economy', and by the swings in investor sentiment towards high-tech stocks over the past two years. These factors have motivated a new Bank report on the financing of TBSFs, which was published on 5 February. As background to this report, an extensive review of the economic literature on the financing of TBSFs has been undertaken, the results of which are summarised in this article. |
