Trade Finance Global (TFG) surveyed firms throughout Europe to gain an understanding of SMEs’ trade finance usage norms and their propensity to pay for new or additional trade finance products and services.
The survey was designed to gain insight into firms based on numerous factors.
This includes; business type, operating location, annual revenue, use of third-party financing, average inventory levels, current number of lenders, current debt utilisation, current cost of debt financing, and letter of credit use.
A total of 64 firms with operations in the four target markets responded to the survey.
Over 80% of the firms surveyed self-identified as either small businesses, traders, or producers, and less than 20% self-identified as corporates or financial institutions.
60% of respondents reported annual revenues between $0-$10 million, while 14% reported revenues greater than $50 million.
Financing use among respondents
In debt financing, money is borrowed and repaid with interest, while equity financing involves selling a portion of a company’s equity.
The results of the survey show that nearly three quarters of all respondents use third-party financing of some design.
Of those, 26% use both debt and equity financing, 45% use only debt financing, and 3% use only equity financing.
Of the financing products used by respondents, trade finance is the most popular: 55% use trade finance, 43% use invoice finance, 29% use supply chain finance, and 27% use term finance and asset finance respectively.