Provision of finance to smaller quoted companies

Quarterly Bulletin 2002 Q1
Published on 01 March 2002

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.

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