Improving the access to finance of small and medium sized enterprises is crucial in fostering entrepreneurship, competition, innovation and growth in Europe. Access to sufficient capital to grow and further develop their activities is a difficulty faced by
many European SMEs. This situation is compounded by the difficulties in accessing finance as SME financing is considered by many financial providers as a high risk activity that generates high transaction costs and/or low returns on investment. Moreover, SMEs need to meet the challenge of adapting to the changing financial environment and to the increasing complexity and extent of financial reporting.

In order to assess the extent to which SMEs face difficulties when it comes to access to finance, the Directorate-General Enterprise and Industry turned to managers of SMEs in the 15 old Member States for their views. A total of 3047 managers were interviewed by telephone between the 5th and the 19th of September 2005 under the Flash Eurobarometer polling system.

The following aspects are covered in the survey:

-The state of SMEs: their financial situation, their growth and development.
-The use of financial instruments: financial institutions and types of financing.
-Access to finance through banks: the use of banks, ease of access now and compared to the past, attitudes towards banks.
-The use of small loans: whether SMEs have done this, their views about it and reasons that would encourage them to do so.
-The use of venture capital: to what extent it is currently being used, do SMEs foresee this to be a form of financing in the future and for what reasons?
-Financial management: how this is done and to whom SMEs turn for information or advice on financing.

The main results will be analysed in the following pages. We will present the results of the survey as a whole and break these down by country and by a number of variables describing the various types of SMEs, namely size, change in number of employees,
sector of activity, years of activity, type of shareholding and turnover. Where relevant, the total results are also analysed by other analysis variables that are included in the data-set.

The sample was selected according to three criteria: country, company size and activity sector. In the countries with the most companies (Germany, Spain, France, Italy and the UK), 300 respondents were interviewed. In those with the fewest companies (Greece, Ireland, Luxembourg, Portugal and Finland), 100 respondents were interviewed, and in the remaining countries (Belgium, Denmark, the Netherlands, Austria and Sweden), 200 managers were consulted.

A technical note indicating the manner in which the 15 EOS Gallup Europe institutes conducted the survey can be found at the end of this analysis. It provides further detail on interviewing methods, sampling and the statistical margins of error.

Full survey