According to the latest Business Opinion survey from ICAEW, the small companies who are applying for external debt finance paying a higher price are most successful. Many of them are not interested in taking more debts, however, they are meeting their needs and managing costs based on existing debt facilities.

Some of the key findings from the latest Business Opinion Survey from ICAEW include:

• Around 58 percent of businesses who are renewing their existing debt facility reported that there is an increase in the interest rate when compared to their previous one. Almost 58 percent businesses referred that when refinancing their facility, there is increase in arrangement fees.
• Almost 29 percent businesses in the past 12 months have experienced some pressure from the main leader, as their main debt facility was altered which generally resulted in change in terms of the facility.

Current usage of external debt facility in SME firms

• External debt facility is used by 65 percent of SME organizations.
• Very common external debt facilities used by small medium-sized businesses are 41 percent term loans, one in four firms use asset based finance and 46 percent overdraft facilities.
• 52 percent of SME companies are finding other ways to meet their financial needs through existing debt finance, 46 percent are reducing working capital, 43 percent are cutting costs.