New Funding Options For SMEs Emerge - Allen & Overy

Debt funds have entered the small and medium-sized enterprise lending market as they have less restrictive capital requirements than traditional banks

Bank loans have traditionally been the only option for small and medium-sized enterprises (SMEs), according to Allen & Overy partner Ignacio Ruiz-Cámara, who says Spain has effectively operated as a banking monopoly for years, with the Spanish banks historically controlling around 99 per cent of lending to SMEs.

"Access to capital markets in Spain was always very expensive, due to legal and tax costs, with key bond offerings being made out of Luxembourg or Ireland," he says. "This meant debt capital markets were mainly available only to big corporations."