Small firms need bank loans tailored to their needs, alternative forms of venture capital, clearer rules on cooperation with lenders, and prompter payments from other firms, said MEPs on Tuesday, in a report calling for legislation to these ends."There are over 23 million small and medium-sized enterprises in Europe, each with its own needs. This wide diversity calls for clear rules to govern financing and alternatives to bank loans. Innovative forms of venture capital can help to fill the gap. Financial institutions and creditors should make more effort to communicate with entrepreneurs, and abide by clear rules on the use of guarantees, early repayment and possible fines", said lead MEP Philippe De Backer (ALDE, BE).
The resolution was approved by 538 votes to 20, with 22 abstentions.Require banks to tailor loans
Small firms, such as family-run businesses, high-tech ventures and start-ups, find it harder than other market players to get finance. Banks that received state aid or European Central Bank support to help them survive the crisis should be required to tailor loans to the needs of small and medium-sized enterprises, say MEPs.
Don't delay Late Payments DirectiveGiven the vulnerability of small firms to late payments from other firms, MEPs urge EU member states to bring the relevant EU directive into effect without further delay.
This directive would require firms to add interest to payments not made within 30 days.Vet EU small business rules for red tapeFinally, the De Backer report also calls on the European Commission to subject all existing and new rules relevant to SMEs to an overall and inclusive impact assessment, with a view to removing burdens and contradictions.
Procedure: Non-legislative resolution