SMEs seeking loans to keep them afloat are facing stricter conditions than earlier this year, with banks favouring larger firms, Erik Sonntag, advisor for entrepreneurship and SMEs at BusinessEurope, told EurActiv in an interview.

Is it getting any easier for companies to access credit?

Yes and no. In our last economic outlook in May, we saw an improvement when it comes to the cost of financing - in terms of interest rates. However, access to credit has become even worse, especially for SMEs. Access has worsened compared to earlier this year. Conditions are now stricter, negotiations are taking longer, and the amounts being loaned are smaller.

So are small firms more likely to go out of business than larger, better established companies?

There is a worry that larger companies might crowd out SMEs. Usually, SMEs essentially depend on bank loans - access to financial markets is very limited. The problem is that due to the whole financial crisis, larger companies might be thinking they can't go to the capital markets, so they are going to banks. If you are a bank and you have a larger company and a small company asking for credit, you will probably hand the money to the larger one if you perceive it as less risky.