European regulatory changes will make banks less willing to lend to SMEs

European regulatory changes will make banks less willing to lend to SMEs

Bank financing is currently the most important external source of funding for small to medium-sized enterprises (SMEs) in Europe. Bank loans make up around 70% of external financing – much more than in the US, where bank loans constitute around 40% of external funding for SMEs. This dependence has arisen historically and has also been supported by the ECB’s monetary policies on credit availability since the last crisis.

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