Loan defaults increase in services sector

Now that loan defaults in the construction and real-estate sectors have declined thanks to the influence of Sareb, defaults are increasing in the services sector. Because of falling consumption, the hospitality industry accounts for one out of every five euros of bank loans. And the hospitality industry and related services have increased their loan defaults by 50.75% this year according to Q1 2013 data.

Moreover, small- and medium-sized businesses, which comprise 90% of all businesses in Spain, are still struggling to get loans. Large companies have an easier time getting the credit they need through stock issues and corporate bond issues.

Small businesses are drowning. But keeping them afloat is critical to bailout out the economy and improving the real economy.