Access to finance continues to be a
major concern for small and medium-sized businesses across Europe,
a new survey among European firms has shown.
The extensive Flash Euro-barometer survey,
carried out by the Gallup Institute upon request of the European
Commission (EC) and the European Central Bank, questioned more than
9,000 firms across Europe on how easily they obtained financing via
bank loans and leasing in the first six months of 2009, at the peak
of the financial crisis.
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Although 29 percent of the surveyed companies
– from all European Union (EU) member states, as well as Croatia,
Iceland and Norway – said that their most serious concern had been
finding customers during the downturn, access to finance was the
second most pressing problem for at least one in six firms.
Assistance for SMEs
The EC has tried to help SMEs access
finance in various ways, from allocating a European Regional
Development Fund (ERDF) for small businesses, to lending via the
European Investment Bank (EIB) and its banking and leasing partners
a total of €30 billion between 2008 and 2011.
Similarly, many countries have initiated
measures themselves to help SMEs.
In Italy, for example, many banks and leasing
companies have joined a moratorium to suspend rental payments for 6
to 12 months, as well as restructuring a huge number of contracts
to help troubled companies.
Though this type of measure has helped to
mitigate extremely difficult market conditions, many European firms
have continued to suffer from the lack of sufficient funds.
According to the Flash Eurobarometer survey, 3
in 10 companies saw a decrease in the willingness of lenders to
provide loans over the first six months of 2009.
Companies in Estonia, Hungary, Bulgaria and
Lithuania were the most likely to say that access to finance had
become more difficult for them, while Nordic firms were the least
likely to share that view.
While the need for loans has increased for 15
percent of surveyed companies, one-third of them said that when
obtaining a loan, both interest rates and non-interest related
costs of financing had increased.
External funding
Almost a quarter (22 percent) of the
surveyed CEOs and CFOs said they had applied for external financing
between the January-June 2009 period.
The proportion ranged from 7 percent in
Bulgaria and Latvia to 38 percent in Greece.
Of those companies which did not apply for
external financing, firms in Slovakia and Romania were the most
likely to say this was because they expected their application to
be rejected.
On the opposing side, at least half of
respondents in Luxembourg, Austria, Germany and Sweden said they
had not applied because they had sufficient internal funds.
Around 60 percent of the surveyed firms said
they used at least one source of debt financing in the six-month
period, with the most popular source – chosen by 30 percent of
respondents – being the bank (overdraft facilities and bank
loans).
However, almost a quarter of companies (23
percent) used leasing, factoring and hire-purchase as one of their
sources of financing.
Use of leasing was significantly different in
the countries surveyed, with firms in Germany, Romania, Slovakia
and Poland reportedly using it the most.
Almost 40 percent of respondents from Romania,
for instance, said they had used leasing between January and June
2009.
On the other hand, only slightly more than 1
in 10 firms in France, Belgium and Portugal used leasing in the
same period.
Leasing figures also differed considerably on
the basis of company size, sector, turnover and other
characteristics.
Small companies – those with an annual
turnover between €2 million and €10 million, as well as those with
10 to 49 employees – were the companies using leasing the most,
followed by mid-sized companies, while micro-sized companies lagged
behind.
Also, the older the firm, the more it was
likely to lease an asset, while start-ups were less likely to
obtain – or look for – a leasing contract.
Similarly, companies with yearly growth
prospects of more than 20 percent (which the report defined as
“gazelles”), as well as innovative companies (those who introduced
at least one form of innovation, such as a new product, service or
process in the 12 months prior the survey) reported a larger use of
leasing.
Antonio Fabrizio
