Financial Structures of Swiss SMEs in the manufacturing industry (PDF)

Master's Thesis from the year 2015 in the subject Business economics - Investment and Finance, grade: 1,5 (Deutsches Notensystem), University of Applied Sciences Northwestern Switzerland, course: KMU Finanzierung, language: English, abstract: The thesis aims to explore the different financial instruments used by Swiss SMEs in the manufacturing industry and factors that influence SMEs when making financial decisions. In this sense, growth, size, age and its impact on financial decision making are examined. Moreover, this research is trying to investigate how satisfied SMEs are with their financial instruments and bank loans in particular, which can also influence SMEs in making financial decisions.

This research was realised using a mixed research approach. Qualitative data was collected by conducting 12 semi-structured interviews with SMEs and experts in the field. For collecting quantitative data an online survey was sent to 1'004 SMEs. All data was collected from companies located in the German speaking part of Switzerland.

Swiss SMEs in the manufacturing industry follow a clear strategy when it comes to financial decision making. In general, the examined enterprises want to act flexible, independent and are risk-averse. These characteristics are reflected when making financial decisions. With regard to family businesses independence is even more important.
Therefore, SMEs focus on using financial instruments that perfectly fit to their strategy. The main instruments used are retained earnings, personal savings, bank loans and family and friends. Size and growth mostly does not have a strong impact. However, the outcomes of the online survey show that growth might have an impact on retained earnings. As most examined SMEs are equipped with a lot of equity these enterprises have no problems when asking for bank loans. The online survey and the conducted interviews further show that most SMEs are satisfied with the available financial instruments and bank loans in particular. This research also concludes that almost no financing dilemma exists. A finance gap is also nearly not existent.

The small sample size with regard to the online survey and limited scope used in this research does not allow generalisation to the population. As SMEs often have a lack of time and are not willing to share financial information to externals it was difficult to find interview partners.