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Access to finance

SME Access to Finance Survey

SME Access to Finance Survey

The European Commission’s Directorate General Enterprise and Industry and the European Central Bank (ECB) established the Survey on the Access to Finance of Small and Medium-sized Enterprises (SAFE) in 2009. The purpose of the survey is to assess the trends in financing conditions for SMEs’ and larger firms' financing conditions. The survey covers 38 countries, including all 27 EU member states and other countries of the European Free Trade Association (EFTA)1 or participating in the Entrepreneurship and Innovation Programme (EIP)2.


The first survey was undertaken in June-July 2009 and the latest in August-October 2011. The findings from the latest survey are detailed in the SAFE Analytical Report(published 7th December 2011). The survey is conducted every two years whilst the ECB Access to Finance Surveyis conducted every six months. The latter covers the euro area countries whilst SAFE has a boosted sample to include and all the EU member states and other countries. A similar questionnaire is used in both surveys.

For SAFE, 15,150 interviews were conducted across 38 countries, including 13,859 interviews across the EU 27 countries. Interviewees included those responsible for a firm’s financial decisions e.g. managing directors, CEOs, financial directors. The sample in each country was stratified by company size and sector. The sample has been weighted to ensure the results are representative of the population of firms in each EU country and in each size class. In terms of topic areas covered, the survey reports on the following in relation to SMEs:

  • Financial situation, growth, innovation and need for external financing
  • Use of internal and external funds
  • Experiences with applications for external financing
  • Use of loans, the size and reasons for accessing specific loans
  • Views on the extent of accessibility to different types of available finance
  • Expectations on future financing.

Main findings of the latest survey

The 2011 survey results indicate that the most cited pressing problems currently facing SMEs after ‘finding customers’ are ‘access to finance’ and 'competition', with 15% of EU SMEs citing finance as an important issue. This represents only a slight fall since 2009 (17%). How pressing access to finance is for SMEs remains constant even after accounting for the following variables: type of firm, age, size, sector, ownership or level of innovation. Not surprisingly, the results support the findings of the ECB Access to Finance Survey.

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Source: EC and ECB, SMEs’ Access to Finance Survey 2011 Analytical Report (7 December 2011).


Access to finance is the most pressing problem in Greece (mentioned by 30% of respondents), Slovenia and Estonia (mentioned by over a quarter of respondents in both countries). It is the second most important issue in Hungary, Romania, Spain, Portugal, Bulgaria, Lithuania and Ireland. Outside of the EU, access to finance is a major issue in Montenegro (36%), Israel (30%) and Turkey (28%).

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Source: EC and ECB, SMEs’ Access to Finance Survey 2011 Analytical Report (7 December 2011).


In terms of sources of financing, there appears to be a sizeable downward shift since 2009 in SMEs using internal funds (i.e. retained earnings or sale of assets) to finance their activities. In 2011, 24% of EU SMEs reported using internal funds while in 2009 it was 49%, - a decline of 25 percentage points. The greatest falls are found in Greece, Ireland and Sweden.

The declining use of internal funds is of note as there are potentially two contrasting explanations for this: (1) over the two years since 2009 SMEs have found it increasingly challenging to generate earnings – reflecting the wider macroeconomic conditions (‘push’ factor); and (2) SMEs have become better or more innovative at accessing external sources of finance. This is indicated by the fact that, although there has been a continuing tightening of credit standards since 2009, use of external finance by SMEs has actually increased over this period (e.g. debt finance has increased by 14%).

SMEs were more likely to make use of external financing than ‘large-sized firms’ (LSEs) – 56% compared with 50% in the six months preceding the survey3.

The most common external sources of finance over the period covered by the latest survey were: bank overdrafts (40%); leasing/ hire purchase/ factoring (36%); trade credit (32%) and bank loans (30%). Applications for banks loans were most common in France (31%) and Slovenia (30%). In contrast Germany, Italy and Poland experienced major declines in the proportion of firms accessing banks loans since 2009. Debt finance was the most commonly used source of finance with 75% of EU SMEs using at least one source of debt finance in the previous six months. Of external finance applicants, two thirds got everything they requested.

Half of SMEs received a bank loan in the last two years - an increase from 46% in 2009. SMEs in Cyprus, the UK and Denmark are less likely to have taken out a loan, while SMEs in Spain, France and Latvia were more likely. The most common amount borrowed was in the range of €100,000 to €1 million, with working capital and land/buildings and equipment/vehicles the main purpose for obtaining the loan.

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Source: EC and ECB, SMEs’ Access to Finance Survey 2011 Analytical Report (7 December 2011).


Companies that used debt financing png - 63 KB [63 KB]

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Source: EC and ECB, SMEs’ Access to Finance Survey 2011 Analytical Report (7 December 2011).


In contrast to debt finance, equity financing was accessed by less than one in ten SMEs (7%) over the previous six months in 2011 and was more used by LSEs (11%) and SMEs owned by venture capital firms (14%). Gazelles (firms less than five years old which have experienced growth at 20% per annum) also more often cited use of equity finance (12%) compared to SMEs overall – as may be expected. Overreliance on debt finance relative to equity risk capital is a potential issue for the way firms grow over time and contribute to economic development. Not only do debt finance firms need to devote resource to servicing of the debt (thus potentially accentuating SMEs cash-flow problems) but also non-venture backed firms tend to grow at a slower rate and be less innovative than those which are backed by equity finance4. Venture backed firms achieve Initial Public Offering (IPO) or trade sale much faster (time from initial foundation to IPO can be nearly halved)5.

Having said this, it is important to recognise that VCs tend to choose firms with high growth potential. Therefore it is more likely that firms which receive equity finance will growth faster than firms which do not. VCs also need to ‘exit’ their investment and therefore venture backed firms are more likely to go to market faster than non-venture backed firms. Also, different types of firms have different growth models and equity finance is crucial for some firms but of less importance to others because they are cash generative from the start.

In 2011, equity finance was most used in Denmark (46%), Lithuania (38%), Sweden (31%) and Turkey (29%) while at the opposite extreme, less than 1% of SMEs in Cyprus, Croatia and Malta used equity finance.

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Source: EC and ECB, SMEs’ Access to Finance Survey 2011 Analytical Report (7 December 2011).


In terms of outlook, the proportion of EU managers who expected their firm’s turnover to grow over the next two to three years increased from 46% in 2009 to 56% in 2011. Specifically on future growth, younger firms tended to be more optimistic compared to established firms with 71% of managers from companies that have been active for less than two years expecting growth compared to 54% of those active for more than 10 years.

When assessing the importance of different mechanisms influencing future financing, SMEs rated highly ‘making existing public measures easier to obtain' (for example through the reduction of administrative burdens).

Overall, common drivers underlying trends observed in accessing finance among SMEs include the intensification of the sovereign debt crisis across the euro area, regulatory tightening and the economic circumstances of individual euro members, with smaller firms generally being more adversely affected as a result. However, access to external funding appears to have improved and is a problem for fewer SMEs. Access to finance also appears to be better within the EU countries compared to countries outside of the EU that were surveyed6. This might be an indication that the measures taken in the EU regarding access to finance for SMEs are having a positive effect, despite the sovereign debt crisis.


1) EFTA is an intergovernmental organisation set up for the promotion of free trade and economic integration for the benefit of four countries: Norway, Iceland, Liechtenstein and Switzerland. See:

2) Full participants in the EIP include: Norway, Iceland, Liechtenstein, Croatia, the former Yugoslav Republic of Macedonia (FYROM), Montenegro, Turkey and Serbia. Albania and Israel are also involved in certain parts. See:

3) LSEs are defined as firms with 250+ employees.

4) See for example: Josh Lerner (2009) Boulevard of Broken Dreams - Why Public Efforts to Boost Entrepreneurship and Venture Capital Have Failed – and What to do About It. Princeton University Press.

5) Ibid

6) For example, access to finance is the most pressing problem for 30% of firms in Israel, compared to an EU average of 15%.

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