In 2023, almost two million SMEs in Spain required financing, accounting for 54.2% of small and medium-sized companies. Although this percentage was lower than the previous year by two percentage points, it remained significantly higher than pre-pandemic levels. The report on SME Financing in Spain by CESGAR highlighted the impact of rising interest rates and product prices on funding needs of SMEs. Despite this, only 17.8% of companies reported growth and improvement while 38.1% stated that their economic situation had worsened compared to the previous year.
Looking ahead, the report showed a decrease in short-term growth prospects for SMEs in Spain. The percentage of companies expecting their turnover to increase in the next 12 months declined while the number of SMEs planning to expand their workforce decreased. The most commonly used financial products by SMEs in 2023 were bank loans, ICO Lines, and credit lines, although there was a notable decrease in non-bank financing compared to the previous year.
In terms of sector growth, the business services sector saw the largest increase in the number of SMEs in 2023, followed by education, health, and construction industries. However, the commerce and personal services sector experienced a decline in the number of companies.
The challenges faced by SMEs included economic instability and reduced profits due to factors such as rising interest rates and product prices. On a positive note, there were signs that some companies were increasing their sales abroad and engaging in innovation activities.
Overall, despite these challenges and opportunities for growth prospects for SMEs in Spain’s economy remained uncertain due to uncertainties about future funding options and job creation potential.
In conclusion, despite challenges faced by Spanish small businesses this year such as rising interest rates and reduced profits due to economic instability or uncertainty about future funding options; some positive signs emerged such as an increase in sales abroad or innovation activities being undertaken by some firms. While short-term growth prospects remain uncertain due to ongoing uncertainties about future funding options and job creation potential; it is clear that resilience will be key for any business looking to succeed during these challenging times.