The results of the Survey on the Access to Finance of Enterprises (SAFE) in the euro area for the period from October 2021 to March 2022 indicate that the recovery in firms’ economic activity continued but firms’ profitability was reduced by surging input costs. The availability of external funds continued to improve, albeit at a slower pace, as euro area firms deemed the macroeconomic environment to have adversely affected the availability of funds. While the availability of external funds was broadly in line with firms’ demand for financing, enterprises reported a tightening of financing conditions and expect a deterioration in the availability of funds
Interestingly enough, the survey refers to trade credit, signaling that while demand for bank loans was similar for SMEs and large companies (4% and 6%, respectively), the increase in demand for credit lines was reported more often by SMEs (9%) than for large firms (5%). At the same time, net demand for trade credit and leasing or hire-purchase continued to increase (12% and 13% respectively), as did demand for other loans (8%), all signaling the need for firms to diversify external finance.
Furthermore, the impact of current global economic outlook with the Ukraine crisis is also analyzed, with some perspectives about a tightening access to finance and other alternative funds.
More information and access to the whole report here.