43. Spain

Key facts on SME financing

99.7% of all non-financial corporations (NFCs) in Spain in December 2017 were SMEs, employing 63.8% of the business labour force. Of these, micro-enterprises dominated with a share of 89.8% of all enterprises.

The expansion of the Spanish economy continued in 2018. GDP growth was 2.6%, somewhat down on 2017. Growth remained very intensive in employment creation. The slight slowdown observed was in line with expectations, but the composition of GDP was very different: domestic demand continued to be very robust, set against the significant slowdown in exports. Activity and world trade were affected by the tightening of global financial conditions and heightening uncertainty over trade conflicts and the Chinese authorities’ difficulties in redressing this economy’s debt.

After an intense contraction of the SME lending during the financial crisis, the activity and business performance of NFCs in general recovered, in particular those SMEs in particular, which began to grow in 2014, and continued all along the period 2015-2018, as did the improvement in their financing conditions.

Short-term loans, for the first year in the recent period, recorded a reduction as a percentage of total loans. In the case of SMEs, at end-2018, 89.7% of lending was short term, which is a higher share than for large corporations and implies that SMEs are more dependent on credit institutions in the refinancing process than large enterprises.

As regards SME credit conditions, the trend of declining interest rates and interest rate spreads, along with a stabilisation of credit conditions, initiated in 2012, continued. The interest rate spreads between loans to SMEs and large corporates also continued to narrow over the same period, progressively falling from the peak 230 basis points (bp) in 2012 to 20 bp in 2018.

General government financing to non-financial corporations has stabilized in the last 3 years. In particular, financing to SMEs during 2018, showed a very moderate increase. This was, however, compatible with a greater availability of liquid funds and easier credit conditions from private-sector banks, so that SMEs found it easier to access private credit rather than public financing.

The economic recovery and the higher demand, along with improved credit conditions, were also evidenced in lower company mortality (bankruptcies). This was also favoured by various insolvency legislation reforms that have stimulated agreements between creditors and the business continuity.

The latest available information on venture capital investments which relates to 2017, indicates equity financing and the related investments with respect to the seed, start-up and expansion stages in that year (EUR 1 146 million) decreased by 1.2 vis-a-vis 2016.

Table 43.1. Scoreboard for Spain
Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018
Debt
Outstanding business loans, SMEs	EUR billion	..	..	..	..	..	..	..	293	258	247	263	229
Outstanding business loans, total	EUR Billion)	893	952	915	896	840	708	609	545	518	493	477	446
Share of SME outstanding loans	% of total outstanding business loans	..	..	..	..	..	..	..	53.79	49.85	50.10	55.14	51.35
New business lending, total	EUR Billion)	991	929	868	665	527	485	393	357	393	323	339	347
New business lending, SMEs	EUR Billion	394	357	263	210	174	146	134	147	165	170	184	175
Share of new SME lending	% of total new lending	39.76	38.43	30.30	31.58	33.02	30.10	34.10	41.18	41.98	52.63	54.28	50.43
Outstanding short-term loans, SMEs	EUR	379	346	246	196	166	139	126	135	154	153	163	157
Outstanding long-term loans, SMEs	EUR	15	11	17	14	8	7	9	11	12	17	21	18
Share of short-term SME lending	% of total SME lending	96.19	96.92	93.54	93.33	95.40	95.21	93.33	92.47	92.77	90.00	88.59	89.71
Government loan guarantees, SMEs	EUR Million	5 550	7 700	11 000	10 100	12 000	11 000	13 000	9 100	7 600	6 500	3 110	0
Government guaranteed loans, SMEs	EUR Million	5 210	7 053	5 906	7 236	7 502	4 974	2 064	938	273	109	42	30
Direct government loans, SMEs	EUR Million	10 103	12 384	19 916	23 740	26 221	23 599	23 648	22 588	21 481	20 734	20 525	20 625
Non-performing loans, total	% of all business loans	..	..	..	5.81	7.84	10.43	13.62	12.51	10.12	9.11	7.79	..
Interest rate, SMEs	%	5.96	5.51	3.63	3.78	4.95	4.91	4.79	3.86	3.01	2.44	2.15	1.89
Interest rate, large firms	%	5.33	4.30	2.16	2.57	3.36	2.61	2.69	1.99	1.97	1.56	1.56	1.69
Interest rate spread	% points	0.63	1.21	1.47	1.21	1.59	2.30	2.10	1.87	1.04	0.88	0.59	0.20
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	35.19	34.36	31.45	30.00	31.22	28.24	25.89	26.04	24.05
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	38.07	36.25	34.67	31.89	31.49	34.36	33.81	32.80	28.14	28.60
Rejection rate	1-(SME loans authorised/ requested)	..	..	22.74	15.87	12.83	18.47	12.85	9.77	7.87	6.95	4.75	5.95
Non-bank finance
Venture and growth capital	EUR Million	..	3 336	3 596	3 600	2 675	2 145	1 473	1 437	1 112	1 160	1 146	..
Venture and growth capital (growth rate)	%, Year-on-year growth rate	..	..	7.79	0.11	-25.69	-19.81	-31.33	-2.44	-22.62	4.32	-1.21	..
Other indicators
Payment delays, B2B	Number of days	5.00	5.00	14.00	12.00	6.00	9.00	16.00	11.00	9.00	8.00	8.00	..
Bankruptcies, SMEs	Number	894	2 550	4 463	4 187	4912.00	6627.00	7517.00	5096	3927	3305	3 310	3 250
Bankruptcies, SMEs (growth rate)	%, Year-on-year growth rate	..	185.23	75.02	-6.18	17.32	34.91	13.43	-32.21	-22.94	-15.84	0.15	-1.81