Euro-area firms report sharp rise in bank borrowing costs in Q2 2026; SMEs face tighter access

Euro-area companies reported a sharp rise in bank borrowing costs in the second quarter, according to the European Central Bank’s latest Survey on the Access to Finance of Enterprises, while access to credit split more clearly between smaller and larger firms.

The ECB said Monday that a net 42% of firms reported an increase in interest rates charged on bank loans in April through June, up from a net 26% in the first quarter. The increase was broad-based across company sizes in the survey, with a net 43% of small and medium-sized enterprises, or SMEs, and a net 41% of large firms reporting higher rates.

At the same time, overall loan availability was little changed. The ECB said a net 1% of firms reported weaker availability of bank loans, an improvement from a net 3% in the previous quarter. But that headline masked a divergence by size: large companies reported improved access, at a net 4%, while SMEs reported a deterioration, at a net 4% negative reading. Firms also reported a modest increase in demand for borrowing, with financing needs for bank loans at a net positive 2%, up from 0% in the first quarter. The ECB’s bank loan financing gap index, which combines financing needs and availability, remained positive and edged up to 3% from 2%.

Other lending terms still tightened, though less sharply than in the prior quarter. A net 31% of firms said other financing costs, including charges, fees and commissions, increased, down from 37% in the first quarter. A net 10% reported stricter collateral requirements, down from 14%.

The figures come from round 39 of the ECB’s SAFE survey, published July 20 and covering the second quarter of 2026. The survey was conducted between May 21 and June 26 and asked firms about developments during April to June. It covered 5,087 euro-area firms, including 4,679 SMEs, meaning 92% of respondents had fewer than 250 employees.

SAFE is the ECB’s regular survey on how euro-area businesses experience access to finance, including loan demand, credit availability and borrowing terms. The figures are reported as net percentages, meaning the share of firms reporting an increase minus the share reporting a decrease, rather than a direct measure of the level of interest rates. The survey period overlapped with the ECB’s June 11 decision to raise its three key interest rates by 25 basis points, taking the deposit facility rate to 2.25% effective June 17, though the survey does not establish a direct causal link between that move and firms’ reported borrowing conditions.