Why Is Access to Financing Becoming Harder for EU SMEs?

[johnblockbuster]

SMEs are facing growing difficulty accessing traditional bank credit due to structurally tighter lending standards. Banks have reduced risk tolerance, increased collateral requirements, and extended approval timelines, with persistent tightening reported through 2024 and 2025.

This environment disproportionately affects smaller firms with limited collateral, shorter operating histories, or volatile cash flows. As a result, many SMEs either face rejection or avoid applying altogether, leading to what analysts describe as “silent credit exclusion” rather than a true lack of demand.

[madmax]

if small firms stop even applying for loans, thats kinda alarming long term