21 Nov Small Businesses Say Farewell to Banks: Alternative Financing Models Grow
Banks have always been the main source of financing for Spanish companies. Above all for SMEs, which, not being able to opt to be listed on the stock markets or access other alternatives, have always found bank financing to be practically the only way to inject capital and issue debt.
However, times have changed a lot and everything indicates that they will continue to do so. It is enough to compare the figures: analysing the data from the European Central Bank (ECB) we can see that, in September 2009, banks were the preferred option for European SMEs when it came to finance themselves, far above other vehicles such as capital increases.
If we take a leap in time, we will see the differences. Nine years later, the same ECB report shows two things: firstly, the loss of prominence of bank financing in the EU; secondly, the progressive growth of other financing vehicles.
Sometimes, the existence of so much bank financing for companies can be seen as something negative, such as companies coming too high in their business forecasts, but it doesn’t have to be like this: “Issuing debt is not bad, because in an expansion cycle, companies that want to grow need to get into debt,” says Jorge Antón, CEO of MytripleA, access portal to ‘crowdlending’ in Spain.
In his opinion, “the problem is that the financial structure had a great weakness: depend solely on bank financing, so that as soon as that source went through difficulties, dried up financing the system and all companies were affected.
Source: El confidencial