---
title: Euro Zone Businesses Are Finding It Harder to Borrow as Banks Tighten Credit
description: Banks tightened credit for euro zone firms again in the third quarter, with higher rates and more rejections. What the ECB surveys show.
author: Dr Marina Nani (Editor-in-Chief)
date: 2026-11-07T20:07:03.926Z
updated: 2026-11-07T20:07:03.942Z
canonical: https://www.sovereignmagazine.com/article/euro-zone-businesses-harder-to-borrow-ecb-surveys
image: https://cdn.nanimediahouse.com/pexels-3760067.webp
categories: Business, Economy, Finance
content_type: News
region: Europe
publication: Sovereign Magazine
about:
  - type: Organization
    name: European Central Bank
---

If you run a business in the euro area and need a bank loan, it is getting harder to get one. The share of firms reporting obstacles to obtaining a bank loan rose to 7% in the three months to September from 5% in the previous quarter, [Reuters reported on 26th October](https://www.reuters.com/legal/transactional/euro-zone-firms-find-it-harder-get-credit-ecb-survey-shows-2026-10-26/), citing an ECB survey of companies. The squeeze comes as more expensive fuel and other rising costs press on company finances.

## What Firms Told the ECB

The ECB's [Survey on the Access to Finance of Enterprises](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr261026~bde7b6d11a.en.html) covered 12,822 euro area companies, 93% of them with fewer than 250 employees, between 26th August and 2nd October.

- A net 5% of firms reported that bank loans had become less available, compared with a net 1% in the previous quarter.
- A net 46% reported higher interest rates on bank loans, up from 42%.
- A net 14% reported tougher collateral requirements, up from 10%.
- Charges, fees and commissions rose for a net 27% of firms, a smaller share than the 31% in the previous quarter.

The ECB summed up the round in one line: 'In this survey round, firms reported that the availability of bank loans had declined by more than their needs.'

## What Banks Told the ECB

The banks' side, published on 27th October, points the same way. In the ECB's [bank lending survey](https://www.ecb.europa.eu/press/pr/date/2026/html/ecb.pr261027~506ef03145.en.html) of 159 banks, a net 9% tightened their credit standards for loans to companies in the third quarter, more than the 5% they had expected. Banks reported a net increase in rejected loan applications for every type of borrower.

Demand for loans from firms fell by a net 6%, when banks had expected a 4% rise. The ECB found that the general level of interest rates was the main reason firms borrowed less.

## Why Banks Are Tightening Credit

Banks named higher risk perceptions and a lower tolerance for risk as the main reasons for tightening, and for some banks geopolitical and energy developments added pressure. Borrowing has also become more expensive across the economy: Christine Lagarde said in October that a [selloff in bonds](https://www.reuters.com/business/finance/ecbs-lagarde-says-bond-selloff-will-slow-inflation-2026-10-17/) was raising borrowing costs in the euro zone and slowing growth. The [energy shock pushing up inflation](https://www.sovereignmagazine.com/article/interest-rate-decisions-this-week-boe-sweden-norway) across Europe sits behind both trends.

## Large Firms Are Feeling It Too

The squeeze has reached big companies. Large firms reported a net 6% fall in loan availability after a net 4% improvement in the previous quarter, while for small and medium-sized firms the figure was a net 5% fall. A net 55% of large firms reported higher interest rates, compared with 38% of smaller firms.

## What Comes Next for Interest Rates and Credit

The ECB left interest rates unchanged on 29th October and [flagged a likely rise in December](https://www.reuters.com/business/ecb-keeps-rates-unchanged-points-mounting-inflation-risk-2026-10-29/), Reuters reported. Banks expect to tighten credit standards for firms further in the final quarter of the year, and they expect firms' demand for loans to stay broadly unchanged. For households, banks expect standards for mortgages and consumer loans to tighten significantly.

One area is growing: banks expect a gradual but sustained rise in demand for loans to build digital infrastructure, especially data centres.

## What to Do If Your Business Needs Finance

- Apply earlier than usual, as rejections are rising and a second application takes time.
- Prepare your accounts and collateral before you approach the bank, as collateral requirements are rising.
- Look beyond bank loans: banks reported that some firms are already shifting towards [other forms of finance](https://www.sovereignmagazine.com/article/nonbanks-investment-banking-revenue-private-credit).

## ECB Interest Rate Questions

**Q: Will the ECB raise interest rates?**
The European Central Bank kept its interest rates unchanged at its meeting on 29th October 2026 and signalled that a rise in December is likely, as it works to bring down energy-driven inflation. Each decision is taken by the ECB's Governing Council and depends on the latest economic data.

**Q: How often does the ECB set interest rates?**
The ECB's Governing Council sets interest rates at its monetary policy meetings, which take place every six weeks. Each meeting ends with a published decision and a press conference by the ECB President.