On 30 September 2015, Commissioner Jonathan Hill presented the Action Plan on Building a Capital Markets Union. ESBA welcomes the Action Plan, which will provide SMEs with much needed alternative sources of financing. Since the financial crisis, followed by the Basel III agreements, bank lending has taken a serious hit and SMEs are in need of alternative options. However, ESBA agrees with the European Commission and underlines the continued importance of bank lending which remains the number one means of financing for many micro and small businesses. Equity financing is a valid and welcome complementary source of financing but we must acknowledge that most SMEs will not be eligible for equity options such as Venture Capital. We also warn against over-regulating tools such as crowdfunding, because they are still developing and work well when driven by market forces.
For the SMEs that do fit the bill for equity financing, it is vital that awareness is raised. ESBA looks forward to working together closely with the European Commission to ensure that SMEs are provided with the proper information and resources. ESBA advises the European Commission to move away from the use of EU portals and to disperse information at a national and local level, closer to the actual intended beneficiaries.
Cross-border investment has potential and is in line with the objectives of the Single Market. Some level of harmonisation will be necessary but the European Commission needs to respect the differences in the implementing capabilities of the 28 Member States.
Access to finance is amongst the biggest obstacles for micro and small companies. We therefore look forward to working with Commissioner Hill and his team to bring the Capital Markets Union to a success.