SMEs in U.K Find Difficulty in Getting Access to Finance

Profitability of an enterprise was seen to be affected positively by labor productivity and negatively by labor costs per employee.

The profitability of the total EU non finacial business economy is 30% of value added. It was found that, the smaller the size of the enterprise, the lower is the profitability. Hence, the micro enterprises are found to have lowest profitability.

In the whole of the EU non financial business economy, micro firms are more likely to favor investments. In case of micro firms, investment in tangible goods is found to be 24% of value added, whereas it is 19% of all firms. This is due to high levels of profitability and labor productivity. The micro firms in real estate sector are found to have high propensity to invest (76%), which constitutes to about 13% of value added.

Coming to problems faced by the small and medium sized enterprises, it was found that in 2009, high number of SME owners (19%), faced problems regarding access to finance.