Bank lending is the most common source of external finance for SMEs, but it doesn’t suit all of them. Young, innovative and fast-growing SMEs, in particular, do not have the required cash flows and collateral for bank financing and need alternatives to unlock their growth potential. Market-based finance is one alternative to help finance the activities of these SMEs. The European Commission’s renewed activities to develop market-based financing need to be stepped up in order to develop a credible capital market to finance SMEs in the EU.
Apostolos Thomadakis, Ph.D. is Researcher at the European Capital Markets Institute (ECMI).
ECMI Commentaries provide short comments on developments affecting capital markets in Europe. They are produced by specialists associated with the European Capital Markets Institute, which is managed and staffed by CEPS. Unless otherwise indicated, the views expressed are attributable only to the authors and not to any institution with which they are associated, and do not necessarily represent the views of the ECMI.
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© Copyright 2017, Apostolos Thomadakis. All rights reserved.
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