The European Central Bank published the latest Survey on the Access to Finance of Enterprises for the euro area, covering the second quarter of 2026, showing that firms faced further tightening in bank lending conditions led by a sharp increase in loan interest rates. Firms reported a small rise in financing needs for bank loans, while overall loan availability was broadly unchanged, though access diverged by firm size, improving for large firms and worsening for small and medium-sized enterprises. The survey also showed that firms expected slower growth in selling prices, input costs and wages, while inflation expectations remained broadly stable across one-year, three-year and five-year horizons. A net 42% of firms reported higher bank loan interest rates, up from 26% in the previous quarter. Other financing costs also rose, though less sharply than before, with a net 31% reporting higher charges, fees and commissions and a net 10% reporting tighter collateral requirements. Financing needs for bank loans increased to a net 2%, while availability stood at net negative 1% overall. For large firms, loan availability improved to net 4%, but for SMEs it fell to net negative 4%, leaving the bank loan financing gap slightly wider at 3% from 2% in the previous quarter. Firms continued to cite the general economic outlook as the main drag on external financing availability, while reporting some improvement in banks' willingness to lend. On pricing and inflation, firms expected selling prices to rise 3.2% over the next 12 months, non-labour input costs 5.2% and wages 2.5%, all below the previous quarter's readings. Median one-year and three-year inflation expectations were unchanged at 3.0%, while the five-year measure edged up to 3.1%. In ad hoc questions, firms identified alternative sourcing and energy-efficiency investment as their main responses to Middle East-related geopolitical tensions, and said planned artificial intelligence investment would be funded mainly through internal funds.
European Central Bank2026-07-20
European Central Bank SAFE survey shows further tightening in euro area bank loan pricing, financing gap rises to 3%
The European Central Bank's latest SAFE survey showed euro area firms faced a further tightening in bank lending conditions in the second quarter of 2026, driven by a strong rise in loan interest rates. Financing needs increased slightly and overall loan availability was little changed, but access improved for large firms and deteriorated for SMEs. Firms also reported lower expected growth in prices, input costs and wages, while inflation expectations stayed broadly stable.