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Businesses are finding it harder to borrow as banks tighten their lending criteria, according to the 36th round of the Survey on the Access to Finance of Enterprises (SAFE) in the eurozone, conducted between 27 August and 3 October 2025. Large eurozone companies reported lower interest rates in net terms during the quarter, whilst small and medium-sized enterprises (SMEs) reported a slight net tightening of bank loan interest rates. In net terms, both large and small businesses reported a further slight tightening of other borrowing terms related to both pricing and non-pricing factors. In Cyprus, based on the latest available data for September, total loans (residents and non-residents of Cyprus, according to the Central Bank’s definition) rose by €231 million, with credit expansion reaching 12.6% on an annual basis. The analysis shows that of these loans, €84.1 million went to domestic residents and credit expansion in this category stood at 3.8% annually. Regarding lending terms, according to the Central Bank’s latest survey published in September, banks expect lending criteria for businesses to become stricter. In the eurozone, 23% of businesses (up from 16% in the second quarter of 2025) reported increases in other financing costs such as charges, fees and commissions, and a net 16% of companies (up from 11% in the previous quarter) reported stricter collateral requirements. The share of large companies reporting stricter collateral requirements increased, whilst that of SMEs remained unchanged. Eurozone businesses reported no change in turnover over the past three months but remain optimistic about the next quarter. Large companies reported improvements in turnover, whilst SMEs reported decreases. Companies, especially large ones, remain optimistic about turnover in the third quarter of 2025. The survey showed businesses continued to record deteriorating profits and the decline was more widespread among SMEs than large companies. Over the past three months, the percentage of financially vulnerable businesses was low and similar to that reported in the previous quarter. Only 3% of businesses faced significant difficulties in their management and debt servicing during this period. More companies reported increased investment over the past three months but were slightly less optimistic about future investment developments. The availability of skilled labour, production and labour costs remain significant concerns limiting output, according to the survey results. Over the past six months, skilled labour availability continued to be the most widely reported significant concern (cited by 63% of businesses). Companies also highlighted finding customers (53%) and competition (45%) as significant concerns, signalling that trade policy uncertainty was affecting their business decisions. Regardless of size, businesses continued to report higher expectations for selling prices and wages. Comparing developments across sectors, construction and services firms expected larger increases in selling prices than trade and industry businesses.
