Capital Markets Union: Banks to provide feedback to SMEs on access to funding
As the Commission gears up to publish the Mid-Term Review of the Capital Markets Union Action Plan on 8 June, it is intensifying its efforts to improve the funding environment for small businesses.
Currently, small and mediumsized businesses often fail to get funding from banks yet they do not receive proper feedback as to the reason why, which hampers future attempts.
The Commission has been working to address this problem by getting the financial industry to do more to help small businesses navigate the complex financial landscape. Five major EU banking federations have now agreed to providing SMEs with the feedback they need so that they can ultimately increase their chances of getting loans.
Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and the Capital Markets Union, said: “Small businesses are the lifeblood of the EU economy. That’s why the financial system must better respond to their varied needs: from start-ups looking for better access to capital to ambitious scale-ups in need of risk finance. Thanks to today’s agreement, SMEs will receive clear feedback on the reasons why their request for financing has been rejected, which will help them to better understand how to actually access the financing they need.”
The Commission today is also publishing a report that maps national and regional initiatives to help small businesses identify a wider range of sources of finance, as well as providing investors and lenders with reliable information about companies.
In a bid to help tackle information barriers in the SME funding market and improve access by innovative SMEs to alternative forms of finance, the Commission has also launched a call for proposals for a maximum amount of € 2.5 million under the Horizon 2020 programme.
This Call for Proposals will allow to support capacity-building projects to address information barriers in the SME funding market and increase the range of financing opportunities by drawing on these successful national initiatives.