In 2023, the economic instability and reduced profits made it difficult for SMEs in Spain. According to the report, only 17.8% of companies reported growth and improvement, while 38.1% stated that their economic situation had worsened compared to the previous year. However, there were some positive signs, such as an increase in the number of SMEs selling in foreign markets and engaging in innovation activities.
Almost two million SMEs required financing in 2023, accounting for 54.2% of small and medium-sized companies. This percentage showed a decrease of two percentage points compared to the previous year but remained significantly higher than pre-pandemic levels. The rising interest rates and product prices had a significant impact on the funding needs of SMEs, as highlighted by CESGAR’s XIII Report on SME Financing in Spain. Despite this, there was a downward trend in short-term growth prospects for SMEs.
Looking ahead, the report indicated a decrease in short-term growth prospects for SMEs. 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 overall.
The report highlighted both challenges and opportunities for SMEs in Spain regarding financing, growth prospects and sector performance. Despite facing challenges such as rising interest rates and product prices affecting their funding needs and reduced profits making it hard for them to grow short term; they still have opportunities like expanding overseas or innovating which can help them overcome those challenges moving forward.
Overall, despite these challenges faced by Spanish SME’s they still have opportunities ahead that can help them overcome these obstacles moving forward with innovation being one key factor towards success.
