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8167.0 - Selected Characteristics of Australian Business, 2008-09 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 16/09/2010   
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BUSINESS FINANCE


Business finance sought

All businesses were asked to report whether they had sought any debt and/or equity finance during the year ended 30 June 2009. If finance had been sought, the business was also asked to identify the types of finance and status of finance sought (i.e. whether it had been obtained, not obtained or was still in progress). For the purpose of the survey, debt finance includes any finance the business must repay, and equity finance includes finance provided in exchange for a share in the ownership of the business. Businesses could report more than one type of finance and more than one status.

Business finance sought(a), by type and status, 2007 - 08 and 2008 - 09

2007-08
2008-09
%
%

Businesses that sought debt or equity finance(b)
18.3
18.8
Type of finance sought by businesses(c)(d)
Debt
90.4
90.6
Equity
22.8
22.2
Debt finance that was:(e)
obtained
89.8
87.2
not obtained
3.3
7.2
in progress(f)
8.9
6.8
Equity finance that was:(g)
obtained
60.7
61.9
not obtained
32.6
33.4
in progress(f)
7.0
5.4

(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.
(c) Proportions are of all businesses that sought finance (either debt or equity).
(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.
(f) As at the end of the reference period, i.e. 30 June 2009.
(g) Proportions are of all businesses that sought equity finance.


The proportion of businesses seeking debt or equity finance during the year ended 30 June 2009 increased by one percentage point from 2007-08 (19%). Of those businesses that sought finance, 91% sought debt finance and 22% sought equity finance. Of the businesses that sought debt finance, 87% obtained it, a three percentage point decrease from 2007-08. Of the businesses which sought debt finance 7% did not obtain it, a four percentage point increase from 2007-08. Equity finance was obtained by 62% of those who sought it, a one percentage point increase from the previous year.

Business finance sought(a), by employment size, by type and status, 2008 - 09

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

Businesses that sought debt or equity finance(b)
14.7
23.6
29.3
36.4
18.8
Type of finance sought by businesses(c)(d)
Debt
90.3
90.2
92.5
94.2
90.6
Equity
20.6
23.1
24.8
33.9
22.2
Debt finance that was:(e)
obtained
88.3
84.7
90.1
91.7
87.2
not obtained
8.6
6.2
4.9
2.1
7.2
in progress(f)
4.0
9.7
8.5
7.4
6.8
Equity finance that was:(g)
obtained
^62.4
^59.6
^65.6
71.2
61.9
not obtained
^34.7
^32.0
^33.9
24.5
33.4
in progress(f)
2.9
10.1
0.5
5.1
5.4

^ 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 employment size category.
(f) As at the end of the reference period, i.e. 30 June 2009.
(g) Proportions are of all businesses that sought equity finance in each employment size category.


The proportion of businesses that reported seeking debt or equity finance increased with each successive employment size range. Of businesses with 200 or more persons employed, 36% reported that they sought finance, whereas 15% of businesses that employed 0-4 persons sought finance. For all four employment size ranges, businesses were far more likely to seek debt finance over equity finance.

At industry level, the proportion of businesses reporting that they sought debt or equity finance was highest in the Electricity, gas, water and waste services industry, at 31%, followed by the Mining industry (29%). Businesses within the Arts and recreation services were the least likely to report having sought debt or equity finance, at 13%.


Reasons for seeking debt or equity finance

Businesses that sought debt or equity finance during the year ended 30 June 2009 were asked the reasons for seeking finance, regardless of whether finance was granted. Businesses were able to choose multiple response options.

Reasons for seeking debt or equity finance(a), by employment size, 2008 - 09

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

Businesses that sought debt or equity finance(b)
14.7
23.6
29.3
36.4
18.8
Reasons for seeking debt or equity finance(c)(d)
Ensure survival of business
36.9
32.5
17.6
8.7
32.4
Maintain short-term cash flow or liquidity
40.9
45.9
39.0
53.7
42.7
Replacement of:
IT hardware
5.4
13.9
17.0
22.0
10.3
other equipment or machinery
30.1
38.9
43.5
28.7
35.2
Upgrade of:
IT hardware or software
6.5
13.8
18.4
22.9
11.0
other equipment or machinery
17.6
21.0
26.0
21.7
20.0
Purchase of additional:
IT hardware or software
6.9
9.5
13.4
23.8
8.9
other equipment or machinery
19.6
26.9
34.2
28.3
24.4
assets not related to expansion
8.1
5.1
6.8
13.7
6.8
To expand business
11.8
21.7
25.4
38.8
17.6
To introduce new or improved goods, services, processes or methods
8.6
16.5
16.3
10.9
12.7
Other reasons businesses sought debt or equity finance
5.9
6.3
6.0
5.9
6.1

(a) Businesses who had sought debt or equity financewere then asked 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 19% 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 (43%). The least reported reason for seeking finance was to purchase assets not related to expansion, at 7%.

The likelihood of businesses seeking finance to ensure survival of the business decreased with each successive employment size range, with businesses that employed 0-4 persons recording the highest (37%) and businesses that employed 200 or more persons the lowest, at 9%.

Businesses within the Manufacturing industry were the most likely to seek finance to maintain short-term cash flow or liquidity (59%).


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 2009. Government organisations include federal, state/territory and local governments. The response options provided were; grants, ongoing funding, subsidies, tax concessions, rebates and other.

Government financial assistance received(a)(b), by employment size, 2008 - 09

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

Estimated number of businesses(c)(d) '000
433
217
60
3
713
Type of financial assistance(e)
Grants %
2.8
5.8
11.0
24.1
4.5
Ongoing funding %
0.9
2.5
5.5
10.6
1.8
Subsidies %
1.1
3.4
9.2
15.6
2.6
Tax concessions %
1.7
4.1
5.6
18.7
2.8
Rebates %
3.5
8.6
10.1
19.4
5.7
Other government financial assistance received %
0.1
0.3
0.1
0.8
0.2
Any government financial assistance received %
8.9
19.7
30.9
52.3
14.3
No government financial assistance received %
91.1
80.3
69.1
47.7
85.7

(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 2009 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.


Overall, 14% of businesses (approximately 100,000 businesses) indicated that they received some form of government financial assistance. The proportion of businesses that received government financial assistance increased across each successive employment size range. Businesses with 200 or more persons employed recorded the highest level of any type of government assistance (52%). The type of financial assistance most commonly reported by businesses employing 200 or more persons was grants, at 24%.

At industry level, the proportion of businesses reporting that they received financial assistance was highest in Health care and social assistance, at 28%. Businesses in this industry were the most likely to receive ongoing funding (13%) and subsidies (6%). Rebates were most commonly received by businesses in Transport, postal and warehousing and Mining, at 16% and 12% respectively.

Innovation-active businesses were almost twice as likely to receive financial assistance from the government (20%) than non innovation-active businesses (11%).


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