SME Chamber

Access to Finance – The future: As seen by SME Associations

Despite all indicators slowly going back to the pre-crisis levels, crafts and SMEs in Europe remain hesitant about the future. Access to finance tops the list of their concerns. UEAPME member associations believe that tailored financial instruments must be secured, improved and created from scratch if need be to answer to the needs of the SMEs they represent, from traditional "mom and pop" small businesses to highly innovative "gazelles", and everything in between.


According to the latest "Craft and SME Barometer" released by UEAPME in March this year (see part 2), the proportion of entrepreneurs expecting a positive or stable economic environment is back over the 70-points line that represents a neutral business climate. Business confidence on average is back around pre-crisis levels, although a "two-speed Europe" seems to be emerging.

Overall, the general situation for the Europe's SMEs improved markedly in the second half of 2010, with the number of respondents viewing the situation positively outweighing pessimists for the very first time since the first half of 2008, when the first Craft and SME Barometer was issued. The indicators on employment expectations seem to be encouraging, with medium sized companies, the hardest hit at the start of the crisis, closing the gap and going back around pre-crisis levels.

On the other hand, despite these somewhat heartening results, expectations for the months and years ahead do not seem so upbeat, especially as far as turnover and investments are concerned. The expectation of a lower turnover could be explained by the fact that margins are likely to decrease as input prices, for instance for raw materials, will go up and small entrepreneurs will not be able to pass the extra costs on to their customers. The reigning uncertainty as regards the financial system could be another factor.


In such a scenario, ensuring SMEs' access to finance is more important than ever. As we have seen in part 2, throughout the current crisis traditional SME lending has been quite stable and a credit crunch has been avoided by an increase of support measures at European and national level. However, European financial markets in many areas are currently not able to provide SMEs with sufficient forms of finance for varying reasons, and this will also be the case in the future.

Moreover, new and stricter capital requirements for the banking sector in combination with other upcoming financial market regulations may further tighten lending conditions for SMEs in Europe.

Furthermore, one must be aware that crafts and SMEs vary as regards their size, the sectors in which they are active and their business models, ranging from micro-enterprises and family businesses that are working successfully in traditional sectors to a growing number of new startups and fast-growing high-tech and highly innovative enterprises. All these different business models have different problems and, therefore, different needs as regards access to finance, which must be respected by future programmes aiming to support access to finance for SMEs.

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