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8167.0 - Selected Characteristics of Australian Business, 2007-08 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 17/09/2009   
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BUSINESS FINANCE



Business finance sought

All businesses were asked to indicate whether they had sought debt and/or equity finance during the year ended 30 June 2008. If finance had been sought, the business was asked to identify the types of finance; status of finance sought (i.e. whether it had been obtained, not obtained or still in progress); and the reasons for seeking finance. Businesses could report more than one type of finance sought, more than one status and multiple reasons for seeking finance.

Debt finance includes any finance the business must repay. Equity finance includes finance provided in exchange for a share in the ownership of the business.

Business finance sought(a), by employment size, by type and status, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Businesses that sought debt or equity finance(b)
14.2
22.3
35.2
36.8
18.3
Type of finance sought by businesses(c)(d)
Debt
89.4
90.5
93.2
94.2
90.4
Equity
20.4
25.6
24.0
29.1
22.8
Debt finance that was:(e)
obtained
86.3
91.9
94.9
97.7
89.8
not obtained
3.9
3.3
1.8
1.0
3.3
in progress(f)
11.6
5.0
9.2
2.7
8.9
Equity finance that was:(g)
obtained
^60.0
^59.2
^65.2
71.5
60.7
not obtained
^30.2
^36.6
^30.2
25.3
32.6
in progress(f)
^9.8
5.0
4.5
3.8
7.0

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Businesses were asked to identify if they had sought any debt or equity finance and, if so, the type of finance sought and whether it was obtained.
(b) Proportions are of all businesses in each employment size category.
(c) Proportions are of all businesses that sought finance (either debt or equity) in each employment size category.
(d) Businesses could identify more than one type of finance and more than one status.
(e) Proportions are of all businesses that sought debt finance in each emplyment size category.
(f) As at the end of the reference period, i.e. 30 June 2008.
(g) Proportions are of all businesses that sought equity finance in each employment size category.


Overall, 18% of businesses sought debt and/or equity finance during the year ended 30 June 2008, with the propensity to seek finance increasing with each successive employment size range. Businesses employing 200 or more persons were more than twice as likely to seek finance as those employing 0-4 persons.

Of businesses that sought finance, 90% sought debt finance, while 23% sought equity finance. Of the businesses that sought debt finance, 90% obtained it, compared with 61% of those that sought equity finance.

Businesses in Mining were the most likely to report having sought debt or equity finance (32%), followed by Electricity, gas, water and waste services (28%).

Reasons for seeking debt or equity finance(a), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Businesses that sought debt or equity finance(b)
14.2
22.3
35.2
36.8
18.3
Reasons for seeking debt or equity finance(c)(d)
Ensure survival of business
35.5
26.8
18.9
8.8
29.5
Maintain short-term cash flow or liquidity
36.4
35.0
41.7
47.7
36.9
Replacement of:
IT hardware
7.2
9.1
16.9
22.5
9.6
other equipment or machinery
26.5
38.6
35.1
29.3
32.0
Upgrade of:
IT hardware or software
9.3
13.3
19.8
21.0
12.5
other equipment or machinery
13.0
17.7
22.6
22.7
16.3
Purchase of additional:
IT hardware or software
5.5
6.9
13.7
21.3
7.5
other equipment or machinery
19.1
19.7
33.3
30.9
21.8
assets not related to expansion
14.9
8.8
12.2
16.0
12.4
To expand business
21.7
26.0
37.6
55.8
26.1
To introduce new or improved goods, services, processes or methods
12.4
17.9
19.2
16.2
15.4
Other reasons businesses sought debt or equity finance
11.0
9.5
6.0
8.6
9.6

(a) Businesses were asked to identify if they had sought debt or equity finance and the reason(s) for seeking finance.
(b) Proportions are of all businesses in each employment size category.
(c) Proportions are of all businesses that sought finance (either debt or equity) in each employment size category.
(d) Businesses could identify more than one reason.


Of the 18% of businesses that sought debt or equity finance, the most commonly cited reason for seeking finance was to maintain short-term cash flow or liquidity (37%). This was highest across the three smaller employment size ranges. For businesses employing 200 or more persons to expand business was the most frequently reported reason debt or equity finance was sought (56%), more than twice the proportion for businesses in the 0-4 and 5-19 employment size ranges.

Almost half of the businesses in Information media and telecommunications which sought debt or equity finance, did so to ensure survival of the business.


Government financial assistance

All businesses were asked whether they had received any government financial assistance (excluding tax deductions for normal business expenses) during the year ended 30 June 2008.

When interpreting proportions presented, readers should be mindful that when comparing data across employment size categories, a higher percentage value does not necessarily equate to a larger number of businesses. For example, in the table below, 56% of businesses that employed 200 or more persons, representing approximately 1,700 businesses, received at least one type of government financial assistance. This compares to 9% of businesses that employed 0-4 persons, which represents approximately 41,000 businesses.

Government financial assistance received(a)(b), by employment size, 2007 - 08

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total

Estimated number of businesses(c)(d) '000
451
197
60
3
711
Type of financial assistance(e)
Grants %
3.1
6.8
12.9
28.5
5.1
Ongoing funding %
0.3
2.9
7.0
9.6
1.6
Subsidies %
1.7
3.6
10.8
18.0
3.1
Tax concessions %
0.8
1.9
5.5
18.3
1.6
Rebates %
4.1
6.6
13.0
19.2
5.7
Other government financial assistance received %
0.3
1.3
1.2
1.4
0.7
Any government financial assistance received %
9.2
18.3
33.5
55.5
14.0
No government financial assistance received %
90.8
81.7
66.5
44.5
86.0

(a) Proportions are of all businesses in each employment size category.
(b) Government includes federal, state, territory and local government.
(c) Estimated number of businesses is at 30 June 2008 and are provided for contextual information only, refer to Explanatory Notes 23 and 24.
(d) Refer to Explanatory Notes 9 to 11 for the scope, coverage and definition of businesses included in the BCS.
(e) Businesses could identify more than one type of financial assistance.


The proportion of businesses receiving government financial assistance increased across each successive employment size range as it did for most of the individual types of government financial assistance. Overall, and across most employment size ranges and industries, rebates were the most commonly reported type of government financial assistance received. A higher proportion of businesses employing 200 or more persons received government assistance in the form of grants than smaller businesses.

The proportion of businesses which reported receiving rebates in Transport, postal and warehousing was over four times the proportion receiving any other type of assistance. Similarly, businesses in Arts and recreation services were almost four times as likely to receive government financial assistance via grants than any other type of assistance.


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