Brussels, 06/02/2013 (Agence Europe) - The European Parliament is calling for clear rules on borrowing and innovative start-up capital to help small businesses with their cash flow.
In a draft resolution adopted by the European Parliament in plenary session in Strasbourg on Tuesday 6 February 2013, based on the report by Philippe De Backer (ADLE, Belgium), MEPs called for legislation to make it easier for the 23 million small companies in the EU to access finance and innovative forms of funding, particularly as small businesses are Europe's economic fabric. The EP explains that family firms, high-tech ventures and start-ups find it more difficult to access funding and need alternative forms of risk capital and clearer rules about cooperation with lenders.
The EP wants banks in receipt of state aid or cash from the ECB to be required to tailor loans to the needs of small and medium-sized enterprises and in order to improve the likelihood of SMEs gaining a loan, MEPs call for clearer rules on cooperation and exchange of information between business and lenders, the use of guarantees, early repayment, fines and calculating lost profits.
In order to help vulnerable small businesses with the problems caused by other firms paying late, the EP urges the member states to immediately bring the 2011 late payments directive into effect that will enable small companies to charge interest on payments arriving after the 30-day payment deadline.
The EP wants the European Commission to submit existing and planned rules applying to small business to a detailed impact assessment to remove red tape.
“Even if access to traditional loans from banks has become very difficult, it is still the most-used financing method by SMEs. That's why we propose practical solutions for alternative ways of financing, such as crowd funding or venture capital, as well as more flexibility in traditional banking loans”, explained De Backer in a press release. British ADLE MEP Rebecca Taylor said more legal clarity was required at both national and EU levels about alternative sources of finance. (EH/transl.fl)