Survey on the Access to Finance of Enterprises in the European Union (SAFE)
Access to finance is the least pressing problem in general and businesses' demands for financing were often fulfilled. However, financing might still be a barrier for smaller and younger companies or in specific countries.
Bank loans and credit lines remain the most relevant sources of financing for SMEs in the EU. 55% of SMEs used credit lines in the past or considered using them in the future, while 50% said that about bank loans and 47% about leasing. Equity financing is relevant for 13% of SMEs.
Access to finance in general is not the main challenge for enterprises. In 2016 it’s only a problem for 9%, compared to 16% in 2009 and 10% in 2015. The top 3 most important problems the SMEs are facing are:
- finding customers (for 25% of them)
- availability of skilled staff or experienced managers (20%)
- competition (13%)
However, in Greece and Cyprus, almost 1 out of 4 SMEs (24%) report major issues with financing.
27% of the EU SMEs actually applied for a bank loan in 2016, while only 6% of them did not apply because of fear of rejection. Out of those that did apply, 7% of SMEs’ bank loan applications were rejected and only 2% declined the loan offer from the bank because they found the cost unacceptable. Some of the applications were still pending at the time of the survey. It means that in total 79% of SMEs managed to get the full or part of the requested bank loan.
In fact, the EU SMEs are reporting fewer loan requests being turned down in general. The rejection rate went down from 15% in 2009 to 8% in 2015 and 7% in the current year. However, bank loan applications from smaller companies are still rejected more often: 12% of micro companies compared to only 1% of large ones.
The financing is mostly used for fixed investments (by 38% of the EU SMEs) and inventory or working capital (34%). Development of new products and hiring or training employees are both reported by 15% of SMEs.
SMEs in the EU also indicated an improvement of the general situation in net terms. There was a net increase in turnover, in the number of employees and a slight net increase in profits. In net terms, they increased investments, fixed assets and inventories and working capital, while the interest expenses decreased. However, the companies are still reporting increases in labour costs and other costs.