For about two-thirds of the larger SMEs, at least one alternative form of financing is relevant. The largest share is found in industry, followed by construction and the machinery, electrical and metal industry.
The analysis builds on four categories:
- basically relevant
- currently used
- applied for in the last 12 months
- application planned
The study distinguishes between larger and smaller SMEs in seven sectors in the discussion. It defines “larger” as SMEs with an annual turnover of more than CHF 2 million and more than nine full-time positions.
Relevance vs use
The relevance of alternative forms of financing is somewhat weaker for smaller SMEs. Relevance and use are essentially in step with each other. Smaller SMEs use alternative financing less often than larger ones. Expressed in figures: on average, 62% of the larger and 54% of the smaller SMEs consider alternative financing relevant, while actual use was 55 and 42 per cent, respectively.
This observation is consistent with other studies on the topic: larger companies tend to act more consistently when raising capital. Thus, smaller companies often do not apply for a bank loan, even though they would have financing needs. Specifically, in 2021, around five per cent of all SMEs applied for a bank loan, and twice as many were discouraged.
Use of alternative forms of financing
In 2021, around one in two SMEs used alternative financing. Rarely do these instruments seem to have short maturities. Only 8% of larger and 4% of smaller SMEs had applied for such financing in the past twelve months.
There are apparent differences across the sectors. Smaller SMEs from industry are at the bottom of the list (3%). Larger SMEs have applied for an alternative form of financing twice as often on average. Alternative financing instruments are used, especially in the construction industry (11%) and gastronomy (17%).
Looking ahead with a horizon of one year, more SMEs plan to apply. There are twice as many in industry, and among smaller SMEs in the MEM industries, even three times as many. The number of planned applications in the hotel and restaurant industry remains constant, while a decline in demand is expected among larger trading companies.
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):