EUROPEAN SMEs are catching on the benefits of leasing, with over half the companies surveyed now using it, according to a report published by Leaseurope on ‘The Use of Leasing Amongst European SMEs’.
The research was undertaken by leading economic consultancy Oxford Economics with the support of Netsol Technologies.
The new report quantifies the increasing importance of the SME leasing market in Europe, examining to what extent, how and why Europe’s SMEs use leasing compared to other forms of finance.
The report is based on a survey of some 3,000 SMEs across nine industrial sectors in eight countries – Germany, France, UK, Italy, Spain, Netherlands, Poland and Sweden -which together account for 82% of total EU economic output and 72% of the European leasing market.
The report finds that:
- Of the SMEs surveyed, 42.5% used leasing in 2013 compared to 40.3% in 2010. This is estimated to have increased significantly to 50.7% in 2014.
- SMEs financed 18.9% of their total investment via leasing in 2013, more than any individual form of bank lending, and it is estimated to have grown to 21.2% in 2014.
- Bank loans of more than three years accounted for 15.5% of SME investment finance in 2013, with the proportion falling as the bank loan duration shortens.
- At the EU level this means that leasing was responsible for financing just over 9 million individual SMEs and about €104 billion of SME investment in fixed assets in 2013, which is estimated to have increased to €121 billion in 2014.
- SMEs also use leasing to finance a greater proportion of their investment than larger businesses.
- Exporting and ‘growth’ SMEs, which generally have higher investment needs, relied on leasing to finance over 20% of their investment in 2013, compared to around 17% for other firms.