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 2010. 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.

Overall, 19% of businesses sought finance during the year ended 30 June 2010. Of the businesses which sought finance, 90% sought debt finance and 23% sought equity finance. Of the businesses that sought debt finance, 90% obtained it. Equity finance was obtained by 60% of those who sought it.

Business finance sought, by employment size, by type and status(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses that sought debt or equity finance(b)		16.7	21.5	28.5	39.8	19.2
Type of finance sought by businesses(c)(d)
	Debt	92.5	86.3	89.9	87.8	90.0
	Equity	17.9	31.0	20.9	34.6	23.0
Debt finance that was:(e)
	obtained	89.6	89.6	94.2	93.3	90.2
	not obtained	5.6	7.4	2.0	1.2	5.8
	in progress(f)	6.2	7.4	4.9	6.2	6.5
Equity finance that was:(g)
	obtained	^61.4	^56.4	^68.5	^60.4	59.8
	not obtained	^38.2	^41.1	^35.1	^37.1	39.2
	in progress(f)	1.7	3.7	1.3	2.6	2.6
^ 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 range.
(c) Proportions are of all businesses that sought finance (either debt or equity) in each employment size range.
(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 range.
(f) As at 30 June 2010.
(g) Proportions are of all businesses that sought equity finance in each employment size range.

The proportion of businesses seeking finance increased with each successive employment size range, ranging from 17% for businesses with 0-4 persons employed, to 40% of businesses with 200 or more persons employed. For each of the four employment size ranges, businesses were far more likely to seek debt finance than equity finance.

Businesses in Mining were most likely to have sought debt or equity finance (36%). Business in Arts and recreation services were the least likely to have sought debt or equity finance (12%).


Reasons for seeking debt or equity finance

Businesses which sought debt or equity finance during the year ended 30 June 2010 were asked the reasons for seeking finance, regardless of whether it was obtained. Businesses were able to choose multiple reasons for seeking debt or equity finance.

Reasons for seeking debt or equity finance, by employment size(a), 2009 - 10
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
			%	%	%	%	%
Businesses that sought debt or equity finance(b)			16.7	21.5	28.5	39.8	19.2
Reasons for seeking debt or equity finance(c)(d)
	Ensure survival of business		37.8	34.5	19.9	12.2	34.3
	Maintain short-term cash flow or liquidity		35.5	40.3	37.5	39.9	37.4
	Replacement of:
		IT hardware	5.9	10.9	15.7	12.8	8.8
		other equipment or machinery	37.6	43.2	44.5	24.5	40.2
	Upgrade of:
		IT hardware or software	8.0	12.3	17.3	15.7	10.6
		other equipment or machinery	17.4	17.7	25.2	19.5	18.4
	Purchase of additional:
		IT hardware or software	4.8	10.3	14.9	13.2	8.0
		other equipment or machinery	20.4	22.3	28.2	25.7	22.0
		assets not related to expansion	6.5	5.7	4.8	^18.4	6.1
	To expand business		11.1	16.6	23.0	43.8	14.7
	To introduce new or improved goods, services, processes or methods		10.5	12.5	8.9	11.0	11.1
	Other reasons businesses sought debt or equity finance		5.4	6.6	4.6	5.3	5.7
^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Businesses which sought debt or equity finance were asked the reason(s) for seeking finance.
(b) Proportions are of all businesses in each employment size range.
(c) Proportions are of all businesses which sought finance (either debt or equity) in each employment size range.
(d) Businesses could identify more than one reason.

For businesses which sought debt or equity finance, the most common reason was to replace other equipment or machinery (40%). The next most common reason for seeking finance was to maintain short-term cash flow or liquidity (37%).

The likelihood of businesses seeking finance to ensure survival of the business decreased as employment size range increased, ranging from 38% for businesses with 0-4 persons employed, to 12% for businesses with 200 or more persons employed.

Businesses in Financial and insurance services were the most likely to seek finance to expand business (42%).


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 2010. Government organisations include federal, state/territory and local governments.

Government financial assistance received, by employment size(a)(b), 2009 - 10
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
Estimated number of businesses(c)(d)		'000	468	244	60	4	776
Type of government financial assistance(e)
	Grants	%	2.8	7.5	12.5	21.1	5.1
	Ongoing funding	%	0.5	1.7	6.5	9.7	1.4
	Subsidies	%	2.7	5.8	10.1	18.3	4.3
	Tax concessions	%	2.6	4.8	7.8	18.5	3.8
	Rebates	%	5.9	7.8	13.3	21.3	7.2
	Other government financial assistance received	%	0.3	0.5	1.1	0.8	0.4
Any type of government financial assistance received		%	13.0	23.6	34.5	53.0	18.2
No government financial assistance received		%	87.0	76.4	65.5	47.0	81.8
(a) Proportions are of all businesses in each employment size range.
(b) Government includes federal, state/territory and local government.
(c) Estimated number of businesses is at 30 June 2010 and are provided for contextual information only, please refer to Explanatory Notes 26 and 27.
(d) Please refer to Explanatory Notes 8 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, 18% of businesses received some form of government financial assistance. The proportion of businesses that received government financial assistance increased with each successive employment size range. It should be noted that while the proportion of businesses that received financial assistance is lowest for businesses with 0-4 persons employed (13%), this equates to approximately 61,000 businesses, whereas 53% of businesses with 200 or more persons employed represents approximately 2,000 businesses.

The proportion of businesses that received financial assistance was highest in Agriculture, forestry and fishing (42%). Businesses in this industry were also the most likely to receive rebates (20%) and subsidies (11%). Grants were most commonly received by businesses in Arts and Recreational services (20%).

Innovation-active businesses received more financial assistance from government organisations (22%) than non innovation-active businesses (15%).