Distinction in travel journalism
Is independent travel journalism important to you?
Click here to keep it independent

15 Nov, 2013

European SMEs Worst Hit By Lack of Access to Finance, Survey Shows


Brussels, 14 November 2013, European Commission Press release – Access to finance is still among the top concerns of the EU’s small and medium sized enterprises and younger and smaller firms are the most badly affected, according to the “Access to Finance” survey released today by the European Commission and European Central Bank. About one third of the SMEs surveyed did not manage to get the full financing they had planned for during 2013 and 15% of survey respondents saw access to finance as a significant problem for their companies. Companies believed that bank financing conditions worsened during 2013, with respect to interest rates, collateral and required guarantees.

European Commission Vice-President Antonio Tajani, Commissioner for Industry and Entrepreneurship commented: “Since the start of the crisis, evidence has consistently shown that SMEs face large and disproportionate obstacles to accessing the finance they need to survive and thrive. This is why we are introducing the COSME programme, to focus on facilitating access to finance for SMEs. COSME will provide a guarantee facility for SME loans up to and even over € 150 000 and we expect that from now until 2020 around 344 000 EU firms will receive COSME backed loans.”

Loan requests denied

Reports of loan denials underline the generally negative perception by SMEs of bank lending possibilities. In total about one third of the SMEs surveyed did not manage to get the full bank loan financing they had planned for during 2013. 13% of their loan applications were rejected and 16% of companies received less than they applied for. In addition 2% declined the loan offer from the bank because they found the conditions unacceptable. And 7% of SMEs were even too discouraged to ask, because of anticipated rejection. This was particularly the case for young companies: 11% of those who have been in business between 2 and 5 years did not apply for a loan because of possible rejection.

Younger and smaller firms suffering

Indeed, younger and smaller firms were more likely to obtain only part of the finance they request, or to be rejected outright. The highest rejection rate was among micro companies employing fewer than 10 people (18%) and among SMEs which had been active for less than 2 years (28%). In comparison, only 3% of loan applications from large enterprises (those with 250 or more employees) were rejected.

SME experiences with loans and equity financing

Insufficient collateral or other bank requirements such as guarantees is most often reported obstacle that companies face when seeking bank financing, followed by interest rates being too high. But equity financing, an alternative, was used by only 5% of SMEs in the survey period. In general, SMEs feel less confident to talk about finance with equity investors or venture capital than they do with banks. The main challenge concerning this source of financing is its lack of availability or prices being too high. This is exactly where the new COSME programme will help by stimulating the supply of venture capital.

Financing conditions differ significantly across the EU

Access to finance was mentioned as the most pressing problem by 40% of SMEs in Cyprus, 32% in Greece, 23% in Spain and Croatia, 22% in Slovenia, 20% in Ireland, Italy and the Netherlands, compared with 7% in Austria, 8% in Germany or 9% in Poland. Rejection rates for loan applications were also highest in Greece and the Netherlands (31%), followed by Lithuania (24%). Ireland (16%), Greece and Cyprus (15%) also accounted for the highest share of companies who were so discouraged that they didn’t even apply for a bank loan.

85% of all loans are still from banks

Half of the loans obtained in the last two years were for less than € 100 000. SMEs are still strongly dependent on bank financing. 85% of loans in the past two years were provided by banks. More than half of EU SMEs surveyed had recently used one or more bank products: 32% of companies used bank loans and 39% used bank credit line or overdraft facilities. Bank loans are also the preferred option of 67% of firms looking for an external financing solution to realise their growth ambitions.

Next steps

The Commission will combat problems with access to finance using the new Programme for the Competitiveness of Enterprises and SMEs (COSME). Running between 2014 and 2020, COSME is the first ever Commission programme that is exclusively dedicated to supporting SMEs. COSME will provide a guarantee facility for SME loans. The programme’s equity facility will also stimulate the supply of venture capital, with a particular focus on the expansion and growth phase of SMEs. In addition, equity financing, an especially important option for high-growth young enterprises, will be stimulated.


The report provides information on the financial situation, financing needs, access to financing and expectations of SMEs, as compared with large firms, from April to September 2013. The survey on the access to finance of SMEs, on which the report is based, was conducted between 28th August and 14th October and covered a sample of about 15,000 firms across a total of 37 countries – including EU member states and other countries participating in the Entrepreneurship and Innovation Programme. The survey was jointly developed by the European Commission and the European Central Bank. While the EU-wide survey was previously conducted in 2009 and 2011, from 2014 onwards it will be conducted every year.

More information:

Report on the Access to Finance of Small and Medium-sized Enterprises (SAFE) in 2013.

EU Access to Finance internet portal

MEMO/13/980 Joint Commission/ECB report: Access to finance and finding customers most pressing problems for SMEs

Interview with VP Tajani: “COSME to spur access to credit for small enterprises

COM-EIB SME initiative endorsed by the European Council in October

Green paper on long term financing