Recent surveys of demand for SME loans confirm that access to finance is not always the main problem. Over the past few years, SMEs have been receiving solid support, contributing to their business development. Inadequate financing in terms of amounts, maturities, repayment schedules and collateral can not only negatively affect payment capacity of borrowers, but also jeopardize development of small businesses as such. Inadequate financing can lead to over-indebtedness which may ultimately result in business failure.

This article describes a number of erroneous judgments about SME financing, defines an approach for more adequate servicing of SMEs and provides two examples.