Alternative forms of financing with solid growth

The financing structure of Swiss SMEs changed significantly in 2021 compared to the situation in 2016. The share of SMEs with bank financing has remained unchanged at around 32 percent. However, SMEs are increasingly financing themselves via non-banks.

While only 6 percent of SMEs had debt financing from non-banks in 2016, this figure had already risen to 15 percent by 2021. Furthermore, Covid 19 loans have led to a sharp reduction in SMEs without debt capital. Whereas 62 percent of SMEs were exclusively self-financed in 2016, five years later, the figure is just over half as high at 37 percent (Figure 1).

Above all, loans from family, friends or shareholders and leasing have gained importance. The most important is the overdraft, followed by Covid 19 loans. Leasing is third in the ranking of the most relevant financing instruments. Around 26 percent of all SMEs use leasing.

Figure 2 shows, however, that while leasing is used more often than private loans or supplier credits, the amount of financing in relation to the balance sheet total of the average SME is lower.

Private loans are used by just under one in four SMEs, with the amount usually exceeding 10 percent of the balance sheet total (blue bars). In 24 percent of SMEs with a private loan, it even amounts to more than a quarter of the balance sheet total.

Pactum AG, in cooperation with the Lucerne University of Applied Sciences and Arts, has published a study that takes a close look at alternative SME financing in Switzerland (only in German):