The European Central Bank’s (ECB) latest survey on the Access to Finance of Enterprises shows that borrowing conditions for euro area businesses grew stricter in the opening months of 2026. Released recently this month, the research report from the ECB—covering the first quarter—highlights a clear net tightening in bank lending terms, even as companies’ overall demand for credit held steady.
ECB also mentioned in the report that firms across the region reported a sharp rise in interest rates on bank loans, with a net 26 percent noting higher costs compared with just 12 percent in the final quarter of 2025.
The increase hit small and medium-sized enterprises (SMEs) as well as larger companies in similar measure.
At the same time, other price-related expenses—such as fees, commissions, and charges—climbed for a net 37 percent of respondents, up from 28 percent previously. Requirements for collateral remained unchanged at a net 14 percent.
Demand for bank loans stayed broadly stable, with a net zero percent of firms indicating higher financing needs, down slightly from the prior quarter. Availability of loans, however, edged lower, registering a net deterioration of 3 percent.
This produced a modest narrowing in the overall bank-loan financing gap to 2 percent, from 3 percent three months earlier.
Looking forward, businesses expect external financing to become marginally harder to obtain over the coming quarter, pointing to a somewhat gloomier outlook than before.
The general economic climate continued to be viewed as the single biggest obstacle to obtaining outside funding, cited by a net 26 percent of participants.
Banks’ readiness to lend showed a small improvement, while companies’ own sales and profit prospects were seen as exerting a mildly more negative influence than in the previous survey.
On the operational side, turnover was essentially flat over the past three months, with only a net 1 percent of firms registering growth.
Looking ahead, however, 29 percent expect turnover to rise in the next quarter. Profits, by contrast, continued to weaken, with a net 16 percent of businesses reporting declines.
Investment activity edged up for a net 3 percent of respondents—below earlier forecasts—yet forward-looking sentiment on capital spending remained positive, with a net 13 percent anticipating further gains.
Price and cost expectations shifted noticeably. Companies now project selling prices to climb by 3.5 percent over the next year, up from 2.9 percent previously, while non-labor input costs—including energy—are seen rising 5.8 percent, compared with 3.6 percent before.
Wage growth forecasts eased modestly to 2.8 percent.
The ongoing conflict in the Middle East was cited as a key driver behind the sharper upward revisions in prices and input costs, though it had no measurable effect on wage expectations.
Inflation outlooks also moved. Median one-year-ahead inflation expectations jumped to 3.0 percent from 2.6 percent, accompanied by greater dispersion in responses, particularly among firms questioned after late February.
Medium-term expectations, however, held steady: both three-year and five-year horizons remained anchored at 3.0 percent, although the spread of five-year forecasts widened.
Conducted between 19 February and 1 April 2026, the 38th round of the survey gathered responses from 10,544 euro area firms, 92 percent of which employ fewer than 250 workers. The results shared by the ECB offer a snapshot of how businesses are navigating higher financing costs amid evolving economic pressures.