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Access to finance

Enterprise Finance Index

 Access to finance

The Enterprise Finance Index (EFI) helps you find facts and figures on the development of SME finance in the EU Member States.

The Enterprise Finance Index aims to provide data and other information about the development of access to finance for SMEs in the Member States and at European level, enabling policy makers to better evaluate the effects of policies on SME-finance across Europe1.


The EFI website provides information and data on: the SME Access to Finance Index (SMAF Index); financial trends in EU member states; access to finance indicators (loans, guarantees, venture capital and business angels investments); access to finance surveys; and implementation of the financial instruments of the Competitiveness and Innovation Framework Programme (CIP).

The EFI cannot give clear-cut answers on the quality of access to finance in EU Member States because of the lack of internationally agreed indicators and the scarcity of comparable data; however, it does provide the reader with a central collection of relevant facts and figures2.

The EFI and its further developments will augment transparency and reduce the need for new reporting obligations and surveys that both add to bureaucratic burdens on SMEs.


The following section presents some of the most relevant highlights in the field of access to finance for SMEs.

Business Angels Europe brings together leading research experts on Europe’s Angel Market

December 2013: In December 2013, 25 leading academics and researchers in angel investment from Europe’s top institutions came together for the first time with a view to developing a co-ordinated approach to providing robust data and intelligence on the angel market across Europe. This conference was organised by Business Angels Europe, which brings together the 12 main angel investment federations of Europe covering 90% of the marketplace. The conference was held in Berlin on 6th December and was hosted by Business Angels Netzwerk Deutschland (BAND). Representatives from the EC, European Investment Fund and OECD also attended the conference. They specifically explored how a more co-ordinated approach to business angel research and data could support planning for major new European programmes being developed from 2014 under Horizon 2020 and COSME. More information on the conference can be found here.

COSME: € 2.3 billion to foster the competitiveness of SMEs over the next seven years

November 2013: An agreement with regards to the EU programme for the Competitiveness of Enterprises and SMEs (COSME) for 2014-2020 was reached in November. The COSME programme is planned to come into force on 1 January 2014. The budget earmarked for the implementation of the COSME programme is EUR 2 billion. In the European Parliament, it was agreed that 60% of the COSME programme budget will be provided to funding through risk capital or loan guarantees for SMEs. Other parts of the programme will focus on helping national authorities reduce bureaucracy and SMEs get access to markets. COSME is also a contribution seeking to implement smart, sustainable and integrated growth priorities under the Europe 2020 Strategy and create a set of measures to promote SME development at EU level though the EU financial engineering instruments. COSME, together with Horizon 2020 research programme, will replace the current Competitiveness and Innovation Framework programme (CIP). Further details can be found here.

Report published on ‘Restoring financing and growth to Europe’s SMEs’

October 2013: The report ‘Restoring financing and growth to Europe’s SMEs’ published by Bain & Company and the Institute of International Finance (IIF) finds that coordinated national remedies are needed to restore access to finance for struggling small businesses in Europe. The report is based on 140 interviews with a broad cross-section of key stakeholders in France, Italy, Spain, the Netherlands, Portugal and Ireland. In the six countries reviewed, new bank lending to SMEs (using loans of less than €1 million as a proxy) declined by 47 percent since the pre-crisis peaks. Declines from the peaks range from 21 percent to 45 percent for Italy, the Netherlands, France and Portugal, and lending dropped by 66 percent for Spain and 82 percent for Ireland. Bain and the IIF identified a large number of national and European initiatives to address SME financing since the crisis in 2008 -- although progress has been decidedly mixed, according to the interviews.

The report recommends four broad solutions to address the SME financing impediments, customized to the country- and sector-specific issues:

  • Create low cost, accurate, comprehensive, timely, easy-to-access information for and about SMEs. Addressing this impediment is central to addressing the other three impediments
  • Reduce administrative, legal, tax, accounting, regulatory, and other burdens on all SMEs, focus limited official resources on high potential SMEs and supporting the legal and financial restructuring of challenged SMEs
  • Provide short-term support to help banks make more funding available through guarantee schemes and credit insurance; provide support to banks and other groups to restructure loans to struggling SMEs
  • Foster a "funding escalator" of a variety of alternative financing products (both debt and equity) for start-ups to mature SMEs; foster the eco-systems of players to source, structure, warehouse, rate, and invest in alternative SME funding products.

European venture capital and social entrepreneurship funds

August 2013: The following regulations are now in force, effectively creating two new regimes for funds wishing to invest in European SMEs: Regulation (EU) No. 345/2013 on European venture capital funds (“EuVECA”); and Regulation (EU) No. 346/2013 on European social entrepreneurship funds (“EuSEF”).

The purpose of EuVECA is to provide a common framework for European venture capital funds in order to:

  • stimulate economic growth;
  • contribute to the creation of jobs and capital mobilisation;
  • foster the establishment and expansion of innovative undertakings;
  • increase undertakings investment in research and development; and
  • to foster entrepreneurship, innovation and competitiveness.

The purpose of EuSEF is to provide a common framework for European social entrepreneurship funds by providing funding to social undertakings that are acting as drivers of social change by offering solutions to social problems. Further details on EuVECA and EuSEF can be found here.

European Council approves € 10.4 billion SME lending instrument

July 2013: The European Council approved the establishment of one single SME support instrument with a total worth of € 10.4 billion. The new instrument is aimed to address the impact from the economic downturn faced by SMEs. The joint proposal by the European Commission and the European Investment Bank envisages to pool the €10bn capital increase to the European Investment Bank - as granted by the European Council in June 2012 under the Compact for Growth and Jobs - with € 420 million of funds from the EU's COSME and Horizon 2020 programmes. Through financial intermediaries, the funds will be used for loan guarantee instruments and securitisation instruments with a maximum leverage ratio of 1:10.

European Investment Fund Publish Working Paper: 'European Small Business Finance Outlook'

June 2013: European Investment Fund (EIF) Research & Market Analysis (RMA) publish the European Small Business Finance Outlook, June/2013, n.18 of EIF's Working Paper Series. The research covers the general market environment for SME finance; the main aspects of equity finance and the SME guarantees / securitisation markets; and details important aspects of microfinance in Europe. A summary of some points from this research are as follows:

  • The overall business environment of European SMEs has further deteriorated and the imbalances between the EU Member States are significant
  • EVCA 2012 figures indicate that private equity and venture investments recorded a downturn, partly due to difficult macroeconomic environment. The gap left by the decline in VC investment has been filled by an increase in business angel activity.
  • Despite the economic downturn the European securitization market performed well; and the SME segment shows low default rates.
  • The European microfinance market shows trends towards efficiency, professionalization and self-sustainability. However it needs access to stable funding.


OECD Publishes Second Edition of the Report on Financing SMEs and Entrepreneurs

May 2013: The Report, ‘Financing SMEs and Entrepreneurs 2013 – An OECD Scoreboard’ published by the OECD, establishes a framework/ Scoreboard for monitoring SMEs’ and entrepreneurs’ access to finance over time. SME and entrepreneurship financing trends are monitored via core indicators covering both debt and equity finance.

The 2013 report us the second edition and covers 25 OECD and non-OECD countries. Information and data is presented for the following countries: Canada, Chile, the Czech Republic, Denmark, Finland, France, Hungary, Ireland, Italy, Korea, the Netherlands, New Zealand, Norway, Portugal, Russia, Serbia, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Thailand, Turkey the UK, and the US.

The report presents country profiles of financial conditions for SMEs in the 25 countries and covers indicators of debt, equity, general market conditions, and review of government policy measures. These are complemented with a thematic chapter on the role of credit guarantee schemes in enhancing SMEs’ access to finance. Chapter 2 on ‘Recent Trends in SME and Entrepreneurship Finance’ identifies the following:

  • During 2010-11 the Euro area growth rate decreased from 1.9% to 1.5%. In Europe, growth performance varied significantly across countries. While some countries, such as Sweden (3.9%), Finland (2.7%), and the Slovak Republic (3.2%) experienced sustained growth rates, Southern European countries like Italy (0.6%) and Spain (0.4%) grew at a much slower pace, or even experienced negative GDP growth, as in Portugal (-1.7%).
  • Outstanding SME loans (i.e. stocks) grew between 2010 and 2011 in the majority of the countries in the OECD Scoreboard, but declined in four countries, including Italy, Portugal, the United Kingdom, and the United States. In the UK and the US, this decline continued a negative trend, so that the stock of SME loans was lower in 2011 than in the pre-crisis period. Business financing in Chile, France, Korea, Russia, Serbia, Slovenia, Switzerland and Turkey was characterised by continued growth in SME lending, though at different rates.
  • VC investment was severely affected by the economic downturn. Countries with high growth rates for venture capital in 2011 included Denmark, Hungary; the Netherlands, and Canada. While strong decrease was observed in Portugal, New Zealand, Switzerland, Sweden and Ireland.
  • The sovereign debt crisis that hit several European countries is expected to lead to further deterioration in the lending activities of banks in 2012-2013, increasing the risk of further credit constraints for small businesses in these countries. Further, the Basel III reforms are likely to affect the use of credit guarantee instruments, depending on the nature of the guarantee institutions.


The EC proposes new reforms strengthening the European Central Bank and the European Banking Authority to create greater banking supervision as part of a banking union

September 2012: The EC put forward proposals for a single supervisory mechanism (SSM) for banks in the Euro area as an important step in strengthening the Economic and Monetary Union (EMU). This would mean that the ultimate responsibility for specific supervisory tasks related to the financial stability of all Euro area banks will be with the European Central Bank (ECB). It is expected that national banks/supervisors will continue to play an important role in day-to-day supervision and in the preparation and implementation of ECB decisions. The Commission also proposed that the European Banking Authority (EBA) develop a Single Supervisory Handbook to preserve the integrity of the single market and ensure coherence in banking supervision for all 27 EU countries.

The Commission called on the European Parliament to adopt the proposed regulations by the end of 2012, together with the other three components of an integrated "banking union" – the single rulebook in the form of capital requirements (see IP/11/915), harmonised deposit protection schemes (see IP/10/918); and a single European recovery and resolution framework (see IP/12/570).

Further details on the reforms can be found from the EC’s press release.


EC’s Public Consultation on Tax Problems Linked to Cross-Border Venture Capital investment

August 2012: The European Commission has launched a public consultation on tax problems linked to cross-border venture capital investments. The Commission aims to collect factual evidence on the problems associated with tax issues on cross-border VC investments; understand why the problems arose; the amount of money involved and the costs to investors, Member States and SMEs.

The overall aim is to estimate the size of the problem and decide whether there is a need for EU solutions to address the problems. Finally, the Commission is seeking suggestions from the public on feasible solutions for Member States and for the VC industry. This consultation comes within the framework of the actions set by the Commission aimed at examining the obstacles which hinder SMEs access to financing.


Association of Chartered Certified Accountants (UK) Publish Report on High-Growth SMEs

July 2012: The Association of Chartered Certified Accountants (ACCA) publish report on the challenges, difficulties and the successes that growth-oriented entrepreneurs (GOE) have in the US, European and BRICSA (Brazil, Russia, India, China and South Africa) economies and compares them with an international benchmark created in the study. It compares businesses in terms of turnover, jobs created, access to finance, innovation, internationalisation, and growth strategies and patterns. A survey was conducted of entrepreneurs who run relatively young businesses (between 2 and 10 years old) and have turned over a minimum of $300,000 after the second year of trading – these are considered to be ‘growth oriented’ businesses.

Some findings of the study (and of relevance to Europe) include:

  • Entrepreneurs in the survey obtained between 60% and 80% of their initial finance from self-investment, mostly from savings (75% on average) or from personal borrowings.
  • European countries with the highest self-investment from savings include: Belgium (97%), Germany (90%) and France (89%). The UK is the lowest investor from savings in Europe but UK entrepreneurs are more likely to sell assets or receive a short-term loan.
  • Among the BRICSA economies, Brazil has the lowest self-investment rate (52%) with 66% from savings, whilst Chinese investment from savings is 85% and in India 41%.
  • Of the ‘external finance’ that entrepreneurs use to start their businesses, the majority was sourced from family and friends (10–25%) and from ‘other’ investors (average 25% in Europe and 35% for BRISCA).
  • Entrepreneurs who self-invest the most achieve higher growth. Possible explanations could include taking increased risk as it is their own money; and not having to repay external debt, which might restrict growth.
  • Bank borrowing ranged widely in Europe from 21% in Spain to 60% in the Netherlands. In contrast, bank borrowing was negligible in BRISCA economies, with the exception of India.
  • One-third of Italian, Spanish and German businesses expect to borrow to pay off or consolidate debt – perhaps seeking better rates – or refinancing because they are using loans for growth capital.


European Venture Capital Association Publishes the Latest 2011 Venture Capital Investment Activity Statistics

May 2012: The EVCA Yearbook 2012 has been published with the latest investment activity data for 2011. The annual data published by the EVCA (and based on PEREP Analytics) is the most comprehensive source for European private equity and venture capital activity data, collected from more than 1,200 private equity firms. The latest results for 2011 indicate that VC (seed, start-up and later stage venture) investment was €3.66bn in 2,925 firms, around the same level in 2010 (€3.67bn) and considerably less than the total amount in 2008 (€6.53bn); SMEs remained the core target companies by VC funds (99% of the invested companies and 97% of the amount). By sector, VC investment is greatest in the Life Sciences, Computer & Consumer Electronics; and Communications. In 2011, total VC investment contributed to 0.027% of total European GDP. Further details on the Yearbook can be found on the following link: EVCA Yearbook Presentation 2012.


OECD Publishes Study on Financing SMEs and Entrepreneurs

April 2012: A Report published by the OECD ‘Financing SMEs and Entrepreneurs 2012 – An OECD Scoreboard’ establishes a framework/ Scoreboard for monitoring SMEs’ and entrepreneurs’ access to finance over time. SME and entrepreneurship financing trends are monitored via 13 core indicators covering both debt and equity finance. Information and data is presented for 18 countries: Canada, Chile, Denmark, Finland France, Hungary, Italy, Korea, the Netherlands, New Zealand, Portugal, the Slovak Republic, Slovenia, Sweden, Switzerland, Thailand, the United Kingdom and the United States. Data are presented for the period 2007-2010, comprising of three distinct economic states: pre-crisis (2007), crisis (2008-09) and recovery (2010). The year 2007 is used as the benchmark year to measure changes in the period 2008-2010. Some of the main emerging trends are identified as follows:

  • Lending to SMEs continued to decline during the recovery period in Finland, Portugal, Slovenia, United Kingdom, United States and New Zealand. In contrast, positive (though slowing) SME loan growth was the trend in France, Italy, Switzerland, Canada and Thailand.
  • Loan authorisation rates for SMEs declined considerably in many countries primarily due to tighter credit standards and negative prospects as a result of the economic crisis. SME loan share of total business loans (i.e. including larger firms) for 2007-2010 varied across countries between 12% and 30%, below the respective contribution by SMEs to national income and employment.
  • During the recovery, SME loan shares declined further in Finland. In Denmark and the United States the SME loan shares did not return to pre-crisis levels. However, in 2010 there were a number of countries which were “outliers” with the SME loan share being higher (or equal to) than the average of 50%. These countries included Hungary, Slovenia, Portugal and Korea.
  • The ECB Access to Finance Surveys (2009-2010) and the ECB Bank Lending Survey (2010) are generally consistent with the findings of the OECD report particularly on credit conditions and slowdown in lending in early 2010.
  • There was a sharp decline in venture capital investment in SMEs during 2008-2009 and investment has not recovered to 2007 levels.


European Investment Fund Launches the European Angels Fund

March 2012: The European Investment Fund (EIF) launched the European Angels Fund (EAF). This is a co-investment fund which provides finance to business angels and other ‘non-institutional’ investors for investing in innovative SMEs. Investment is across sectors and development phases of an SME (seed, early or expansion stage). Follow-on investments in existing portfolio companies of the business angels might be possible but only in exceptional cases. Co-investment with business angels is not on a deal-by-deal basis. The EAF enters into a long term contractual agreement with angels by setting up co-investment framework agreements (CFAs). Through these the EAF grants a predefined amount of equity for business angels for future investments. The total investment available under an individual CFA ranges between €250,000 and €5million. The EAF does not pay a management fee to business angels but shares investment-related costs on a pro-rata basis.

The EAF was initially set-up in Germany in cooperation with Business Angel Netzwerk Deutschland (BAND) and the European Recovery Programme (ERP)-EIFDachfonds. The EAF will be rolled out to other European countries and/or regions to give pan-European coverage.


European Parliament Publishes Study on ‘Potential of Venture Capital in the European Union’

February 2012: A Report published by the European Parliament’s Committee on Industry, Research and Energy (ITRE) highlights the potential of VC in the EU. It notes a number of problems faced by Europe including: shortage of both supply and demand for VC; low fundraising from private institutional investors (‘low supply quantity’);’low number of qualified, experienced, and sufficiently large VC funds’ (‘low supply quality’); and ’thin markets’ i.e. difficulty of matching the demand and supply side. It is pointed out that European VC is not attractive to investors due to low returns (as result of both supply and demand issues) and legal, ‘double tax’, administrative issues. Added to this is the fact that the EU VC industry is highly fragmented which results in higher costs, in turn diluting funds’ returns.

The report recognises the existence of ‘heterogeneity’ in the types of investors operating in the European VC industry (e.g. independent, bank-controlled, corporate and public-sector related). It also points to the fact that VC investment in the EU is associated with positive impact on firm’s growth, productivity and innovation performance. However, European VC investment is noted as being particularly limited in the seed phase. The study puts forward a number of suggestions for the development of a European VC ‘ecosystem’ which address the current problems and barriers.


OECD Publishes Study on ‘Financing High-Growth Firms, The Role of Angel Investors’

January 2012: A comprehensive Report on seed and early-stage business angel financing for high-growth companies has been published by the OECD. The report reviews angel investment in OECD and non-OECD countries, including definitions, data and processes. It covers developments in these countries and identifies some of the key success factors, challenges, recent trends and policy measures for the promotion of business angel investment. Over 100 people from 32 countries were interviewed as part of the study. The following is of relevance to Europe:

  • The angel investment sector is growing and becoming more formalised through the creation of angel groups and networks. However, angel investing tends to be local and no ‘homogenous’ national angel market exists.
  • Angel investment is consistently larger than seed and early-stage venture capital.
  • Although angel investment is higher than VC, high-technology based firms receive less angel investment compared to VC.
  • Accurate data collection on angel investment continues to be a ‘major’ challenge. To address this, EBAN has recently announced a partnership with Bureau van Dijk to enable both organisations to match and supplement each other’s (private and public) data.
  • The number of European deals and amount invested by known angel groups/ networks generally increased during the period 2006-2009.
  • The most active angel markets in Europe are in the UK and France, followed by other Western European countries. Angel investing is relatively new in Central and Eastern European countries.


SME Leasing Report

November 2011: Leaseurope, the federation representing the European leasing industry, released a research report on the use of leasing amongst European SMEs, undertaken by Oxford Economics. A lease is where a leasing company makes an asset it owns available to another party for a certain period of time, in exchange for payment.

The report aims to quantify SME’s use of the various forms of leasing that exist in Europe. It establishes an evidence base to help policymakers and stakeholders in the SME finance sphere understand the important role leasing plays in financing European SME investment. The report is based on a survey of just under 3,000 SMEs across nine industrial sectors in eight countries (Germany, France, UK, Italy, Spain, Netherlands, Poland and Sweden). These countries account for 83% of total EU economic output and 78% of the European leasing market.

Some of the key findings from the report:

  • Leasing was used by more European SMEs than any individual form of bank lending. Of the SMEs surveyed, 40% used leasing in 2010 and this figure is expected to increase to 43% in 2011.
  • 40% of SMEs translates into 6 million individual micro, small and medium-sized firms in the 8 countries in the sample having used leasing in 2010.
  • Leasing was used by more SMEs than bank loans of over 3 years (38%) or overdrafts (37%).
  • 6.7% of total SME investment was financed by leasing in 2010, a figure which was expected to grow to 18.6% in 2011.
  • At the EU level this means that leasing was responsible for financing just over €100 billion of SME investment in fixed assets in 2010 and was expected to increase to €112.5 billion in 2011.
  • SMEs use leasing to finance a greater portion of their investment than larger businesses.
  • SMEs who use leasing invest more than those who do not use leasing. SMEs who use leasing invest 57% more on average than non-users of leasing.
  • An even greater uptake of leasing by European SMEs would boost potential economic growth.
  • The report simulates the impact on European growth levels under various scenarios and shows that relatively modest increases in the uptake of leasing by SMEs would add an extra 0.9% to 1.5% to the level of GDP by 2020.
  • Set against the Eurozone’s long term growth trend of 2% per annum, this boost to the economy would be significant.

For further findings please consult the Leaseurope SME Report Executive Summary.


1 Communication "Financing SME-Growth - Adding European Value", COM (2006) 349 final, 29.6.2006: "improved data make(s) it easier to evaluate policies and their results at EU and national levels. (...) The Commission sees the importance of having solid data on SME finance and to use such data to monitor the impact of the new financial environment on SMEs access to finance and thus to ensure a follow-up of this communication."

2 Please note that data on this website are mostly collected from other institutions that co-operate with the European Commission. The Commission makes every effort to ensure that this website is a helpful tool for users but cannot be held responsible for the accuracy of the data displayed.


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