Small Businesses Complain About Access to Capital
Banks say companies are more interested in borrowing, but small businesses counter that they still have a difficult time landing a loan, an ETV feature revealed.
Chairman of the Board of SEB Bank Riho Unt said banks in Estonia are prepared to issue loans and that companies have greater potential to be approved for them than most of them currently realize.
Unt says the brisker borrowing is being seen mainly among the larger corporations.
A small business representative agrees.
"The business community is definitely showing more interest in borrowing, but if we look at owners of small business, not business people in the abstract, access to capital is still problem number one for them," said Estonian Association of SMEs (EVEA) president Marina Kaas.
She said the crisis years swallowed up a large share of companies' collateral, especially real estate. "And the situation comes up where banks are essentially looking at the personal homes and other worldly possessions of entrepreneurs, as a so-called personal surety is also being required," said Kaas. He said that even projects funded partially from EU Structural Funds had a difficult time securing co-financing from Estonian banks.
Nordea Bank board member Andreas Laane defended the banks, saying that times were hard. "Banks analyze projects and give loans to business people who have a good plan, good ideas and the capacity to repay the loan," he said.
Kristopher Rikken