Financing is growing through a credit card between Spanish SMEs and entrepreneurs. 23% have been financed with this means of payment in the last 12 months, as can be seen from the IX Entrepreneur DNA Study 2017 prepared by Hiscox, a company specialized in insurance for SMEs, freelancers and entrepreneurs.
The report includes the responses of more than 4,000 owners or directors of small businesses with less than 50 employees in Spain, Germany, Great Britain, Holland, France and the United States.
Credit card as form of financing
Spanish and American entrepreneurs are the ones who use the credit card as a form of financing (with 23%, both countries). This figure is almost double that in Germany (12%) and almost four times more than in France (6%). In addition, Hiscox’s study indicates that this trend will continue to rise, and in addition to those who already use it, 11% of Spanish respondents say they would be thinking about using it. A figure that stands three points above last year’s results (8%).
Another of the conclusions of the study is that more and more, our entrepreneurs and SMEs avoid financing through banks: 62% have not used or valued using bank financing in recent months.
Economic recovery that the country is going through
The main reason is that, despite the economic recovery that the country is going through, small business owners still encounter difficulties in accessing loans. Specifically, only 11% of Spanish respondents consider that accessing bank loans in 2017 is “simpler” compared to the previous year. This figure is two points below the 2016 results, in which optimism reached 13%.
Despite this, 24% of entrepreneurs have been financed via a bank in the last 12 months, and although they are four points less than those who made this claim in the previous edition of the study (28%), this method still It is more important in Spain than in the rest of the countries analyzed.
Among the fastest growing financing channels for entrepreneurs and SMEs in Spain in the last twelve months is the crowd sourcing. The use of this type of financing stands at 4%, but the number of respondents interested in activating this type of formulas in the coming months is increased by three points (from 8% to 11%).
Financing through venture capital or venture capital funds stood at 3%, as in the previous year, but the number of Spanish entrepreneurs who consider accessing these types of products is doubled: 9%, in 4% ratio last year.
Re-mortgage housing has been another financing solution for 3% of respondents – same figure as in 2016 -, although a percentage point rises (from 6% to 7%), the number of entrepreneurs studying to launch this formula.
Friends and family are still other common options when raising money
In this sense, loans granted by family and friends dropped by one point in 2017: from 17% to 16%. Although, paradoxically, this year the number of entrepreneurs who plan to go to them in the coming months increases: from 9% to 13%.
Regarding capitalization, 83% of Spanish SMEs consider it “difficult” to attract investors to their businesses. The results in Spain are in tune with the Eurozone, France (74%) and Germany (71%).
The number of SMEs that requested credit from banks has dropped two points, from 16% to 14%. The proportion of respondents who have used crowdsourcing or peer-to-peer loans has doubled from 3% to 6%, and 12% say they could make use of this funding in the coming months, double those who made this claim (6%) in the previous study.
The proportion of entrepreneurs in the United States and the United Kingdom who use the venture capital market for financing has also increased sharply (from 3% to 10% in the US and from 2% to 5% in the United Kingdom). In the United States, France and Germany there has been a notable increase in entrepreneurs who have chosen to re-mortgage their home (from 3% to 9% in the US), and also increases the number of SMEs that consider this option for the coming months in the United Kingdom and the Netherlands (from 5% to 9%).
Around 6% of SMEs surveyed in the United Kingdom have turned to the EU to obtain financing in the last year, compared to 2% of the previous study, and 9% are thinking about doing so in the coming months (compared to 7%) .
Among those under 40, the three most common sources of financing have been friends and family, credit card and banking entities, each used by 26% of respondents.
In addition, among the entrepreneurs of this generation, the use of financing through the European Union, national and local public entities, from 6% to 18%, from crowd sourcing, from 8% to 18%, and from venture capital, from 6 % to 18%.