Over 50% of SMEs required financing in 2023, nearly 20% higher than pre-pandemic levels

In 2023, almost two million SMEs in Spain needed financing, representing 54.2% of small and medium-sized companies. While this was a decrease of two percentage points from the previous year, it was still significantly higher than levels before the pandemic. The XIII Report on SME Financing in Spain, prepared by the Spanish Confederation of Guarantee Companies (CESGAR), attributed this need for financing to the rise in interest rates and high product prices. Despite these challenges, there was a downward trend in the growth prospects of SMEs in the short term.

According to data from the National Statistics Institute, Spain had almost 3.5 million SMEs at the beginning of 2023. Economic instability and reduced company profits made 2023 a difficult year for SMEs. The president of CESGAR, José Pedro Salcedo, highlighted the complexity of the situation for these companies due to interest rates not falling. Only 17.8% of companies reported growth in 2023 compared to the previous year, with many experiencing stable or worsening economic situations.

Despite these challenges, the report also highlighted positive factors for SMEs. The percentage of SMEs selling in foreign markets increased, as did the number of companies engaging in innovation activities. Looking ahead, there was a slight downward trend in short-term growth prospects for SMEs, with fewer companies expecting an increase in turnover and more anticipating a decrease. The most common financial products used by SMEs in 2023 were bank loans, ICO lines, and credit lines, with a notable increase in non-bank financing due to digitalization needs.

In terms of the business fabric, the report noted growth in the number of SMEs in the business services sector, education, health, social services, culture, sports, construction, and information and communications. However, some sectors saw a decline in the number of companies. Overall, the report provided insights into the challenges and opportunities facing SMEs in Spain in 2023.