95% of SMEs in Hungary Have External Funding

95% of small and medium-sized enterprises have external sources of finance, 67% of which are bank loans, the Macronóm Institute said, according to its latest corporate research.

It was highlighted that 52% of companies received an advance from the Hungarian Development Bank or the EU, 37% received funds from the Growth Loan Program and 35% of the respondents obtained MAX financing from the Széchenyi Card Program.

This year, 44% of firms are due to mature their debt, and 62.5% of them plan to raise new external funds this year, the survey shows. 46% of respondents would raise external funds for working capital financing, one third of firms to ensure day-to-day liquidity and 34% for energy efficiency investments.

According to the survey, around half of firms plan to raise at least HUF 200 million, while 35% plan to raise more than HUF 400 million.

High interest rates are seen as the main problem, with 80% of respondents considering interest rates below 5% acceptable for new forint loans.

Half of the firms – 54% – expect a moderate increase in financing costs in 2023, but even so, the majority of businesses consider the problem manageable.

The institute conducted telephone interviews with the heads of 100 Hungarian companies in February this year, mostly in the manufacturing sector, with a turnover of 1 to 5 billion forints and between 21 and 50 employees.