The European Union and many of its individual member states are working on ways to improve SMEs’ access to working capital on the understanding that small businesses are the backbone to economic strength and employment. These efforts are largely fueled by the impacts of the economic crisis, which forced banks to adopt more stringent lending rules. SMEs saw higher interest rates, if they were approved for a bank loan at all.Today, alternative funding is viewed by many as the remedy to SMEs’ weakened access to working capital, though some research shows that banks are relaxing their lending behaviors.New proposals by the Basel Committee on Banking Supervision, however, could introduce a new wave of SMEs unable to access working capital from a traditional financial institution. Experts agree that, if approved, the Basel regulations would have widespread effects on the banking sector and the SME community throughout the jurisdictions that adopt them. Just what those effects are, however, are unclear, and are likely to vary from country to country. The Basel Committee’s proposals are likely to harm SMEs that depend on banks to access capital, but they may also boost the alternative lending markets in nations that embrace the industry.