Are the New Sources for Financing SMEs a Reality or a Chimera?

Abstract

Small and medium-sized enterprises (SMEs) are a key pillar of the European economy because they play an important role in generating growth, employment, and value added. However, SMEs cannot access funding from sources such as issuing securities because they do not meet the listing requirements of official markets. This is why these firms are forced to cover their financial needs by borrowing from banks and reinvesting profits. For this reason, several alternative markets have been launched in Europe. In the Spanish case, two alternative markets have been created (one equity trading market and one debt market). In this chapter, these markets are presented for the purpose of analyzing to what extent they are a real solution to the financing problems faced by Spanish SMEs. This research shows that these two markets follow different paths, although for the time being, they are not capable of reaching a large number of companies.