Spain | Business loans: a matter of demand

Summary

Spanish companies have reduced their debt over the past decade, largely due to a contraction in bank credit. The performance of this type of credit has been negatively influenced by demand-side factors, especially weak levels of investment.

Key points

• Key points:
• Spanish companies have balanced their financing, having shifted from relying predominantly on debt in 2008 to having a more balanced structure between equity and debt nowadays.
• Lending to businesses has fallen sharply, especially in sectors such as construction and real estate, from more than one trillion euros in 2008 to 540 billion now.
• Since 2015, an increased willingness among banks to grant financing has contributed positively to the trend in credit.
• Demand-side factors such as low investment, the greater presence of intangible assets or other sources of financing, have all contributed negatively to the wider trend in credit.
• In 2025, we expect lending to businesses to grow, although a national strategy that promotes sustainable and lasting investment will be key.

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