Small firms in Europe have better access to external finance than they did two years ago, according to research by the European Central Bank (ECB).

The ECB said that between March and September 2010 the proportion of SMEs reporting a worsening in access to bank loans, at 24 per cent, almost halved compared to the previous survey, when it stood at 42 per cent.

At the same time, 12 per cent of SMEs reported an improvement in access to bank loans, compared with 10 per cent in the previous round. The ECB said, “The factors which have an impact on the availability of external financing have improved, especially those concerning the economic outlook.”

The survey, which was developed in collaboration with the European Commission, also showed large firms bank loan application success remained stable at a high level and the overall financial situation showed clear signs of improvement.

Overall, euro area SMEs generally reported broadly unchanged needs for external financing between March and September 2010, with a net percentage of 3 per cent of firms seeing their needs for bank loans increase in that period, compared to 16 per cent in the previous survey, which covered the period from October 2009 to March 2010.

Article contributed by Credit Today

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