Ways of financing for small and medium enterprises


BancosIn a few years, it has gone from the almost indiscriminate granting of credits to the practical non-existence of the same. The crisis has had dramatic consequences for the economy, which has questioned in many aspects the current system and has ended in a rethinking, for example, of the Spanish financial system, with the disappearance of the vast majority of savings banks.

Historically, banking has played an almost absolute role in the financing of Spanish companies. But the years of difficulties crossed by the sector and the economy have put this situation aside. The banks have had to make a transformation to be more solvent in Europe, and the requirements imposed from Brussels and from the Spanish government make it impossible for the granting of credit to be as before: accessible and cheap.

The tap for SMEs has been closed since 2008 when the worst moment of the crisis began. Six years later, the situation has changed, but the aid still comes with a dropper. The latest data from the Bank of Spain, from March of this year, indicate that the new loans granted to non-financial corporations for an amount of up to one million euros reached 11,795 million euros, which represents an advance of 5.08% compared to March of the previous year. But loans of more than one million suffered a year-on-year fall of 16.6%.

Fewer credits

The overall summary offered by the Bank of Spain is that the financing granted to companies continues to fall, and especially the loans granted by the banking sector. Bank credit to small and medium-sized enterprises decreased at a cumulative year-on-year rate of 5.2% in the first quarter. The Spanish economy needs to reactivate to complete the recovery. And SMEs have an essential role in this process.

More and more alternative ways of financing for SMEs appear. Two of the latest developments in the Alternative Stock Market (MAB) and the Fixed Income Market (MARF). They offer the possibility of listing on the stock exchange, but in a more flexible and economic way than the large companies. The SME makes an offer for the market, and also acquires the status of a listed company.

Although the loan has been reactivated, the requirements are very demanding and the cost is very high Another of the formulas that are gaining more and more relevance among SMEs and entrepreneurs is crowdfunding, a very simple system that aims to bring people together individuals around a project -connected through web platforms- to finance it in exchange, logically, for participation and obtaining some benefit- visit to.

And banks, although with many qualms when granting loans, the truth is that this year they have completed their financial offer with products that were not seen for a long time, as is the case of housing mortgages and special lines for SMEs Most of the main entities have reactivated the business loan, but the requirements are very demanding and the cost is important.

Other options

The small and medium businessman and the entrepreneur have a wide variety of options to support their business in any of the phases in which it is: from its creation, through its growth and even reaching internationalization. In addition to banks, MAB and MARF, crowdfunding, business angels or venture capital -the latter two are more focused on giving the initial boost to companies-, there are other possibilities at the national, regional and European level.

Some financing lines are crossed; that is to say, for example, there are autonomous communities that grant credits or subsidies to companies of the region that go to quote to the MAB; or banks that, in addition to their own offer, market the European Investment Bank (EIB) lines.

Only 50% of Spanish SMEs that apply for a loan get it The maximum request of SMEs in the field of financing is easy to access, practical and with preferential conditions, or at least affordable, in line with what is being in Europe, since currently in Spain the credit costs for SMEs are two or more times higher.

The outlook for the coming months is encouraging, although caution persists. Most experts foresee an improvement in the granting of credits to smaller companies. But it would be an improvement in comparative terms to previous years. Real growth rates are transferred between 2015 and 2016.

The choice between all the options is as simple as analyzing which is the one that fits our project and shows needs. And if you enter into a formula that requires negotiation, the most important thing is, rather than getting full credit, the cost that it will entail. Brussels recently recognized that only 50% of Spanish SMEs that apply for a loan get it because of the high financial interest they have to bear.