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Access to finance

Better borrowing environment

Two hands holding banknotes

Most businesses in Europe rely on bank loans for their external financing. However, borrowing can be difficult for SMEs - particularly if they lack collateral or do not have a long enough track record or credit history. For this reason, governments and other public authorities often facilitate small businesses' access to lending via various loan and guarantee schemes.

The European Commission closely monitors the markets for business loans and provides tools and information to help businesses, such as the guide for SMEs on how to work with banks (July 2005). Since 1993, it has also organised Round Tables between Banks and SMEs to find good practices and make recommendations on how to facilitate access for small businesses to loans by improving their relations with banks.

An important piece of legislation is the EU Capital Requirements Directive (CAD), which defines the capital that banks have to set aside against their lending and imposes obligations to provide information for both banks and their customers.

More loans available

Since 1998 the European Union has used a set of financial instruments (guarantees and venture capital) to increase the volume of finance available for small businesses. Since then, about 360 000 small businesses have benefited from the guarantees provided by the European financial instruments.

For the period 2007-13 these instruments are part of the Competitiveness and Innovation framework Programme (CIP).

  • Further information about Commission policy initiatives on loan guarantees.


The EU works actively in this field to help the Member States and regions improve their provision of microcredit to entrepreneurs through policy learning and by spreading good practice.

  • Further information about Commission policy initiatives on microcredit.

Improving the markets for mezzanine instruments

The Commission is committed to improving the European markets in instruments combining the features of loans and equity finance. This so-called mezzanine finance is suited to supporting businesses in various phases of their lifecycle such as growth or transfer of the business.

Specifically, the European Investment Bank (EIB) and the European Investment Fund (EIF) are currently developing a mezzanine financing instrument.

How to get loan finance

In practice, the Competitiveness and Innovation framework Programme (CIP - 2007-13), comprises a set of financial instruments which are managed by the European Investment Fund. Financial intermediaries wishing to apply for these instruments can visit the EIF web pages concerning the SME guarantee facility.

For SMEs, an overview of debt finance supported by the EU can be found on the single portal on EU finance.

Practical guidance

Further reading on loan finance can be found in the publications section.

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