The implementation in the EU of the “Basel III” rules on capital requirements for banks is fast becoming a source of concern for SMBs, as they believe it will result in considerably higher trade financing costs and tighter credit conditions for small and medium-sized businesses as well as start-ups.

The irony of this regulation, devised to safeguard consumers is that it could do the opposite for one of the most vulnerable sections of the business community made all the more unstable by the current economic conditions in Europe.

Looking at what SMBs said were their biggest challenges for the next 6 months in Sage’s most recent Business Index – rising costs, uncertainty in the local economic market and reduced cashflow were the top three concerns. Add to these the inability for a small business to access credit and we could be looking at the “perfect financial storm”. Some might say we already are. But we know from this and past Sage Indices that SMBS are a hardy lot which have already weathered a number of years of harsh trading environments.

With high levels of unemployment across Europe, the contribution of SMBs cannot be underestimated and anything that affects a business from being able to invest and grow could ultimately cause more damage than good.

Meanwhile, the UK Government has unveiled a £100bn package “funding for lending” scheme. It’s aimed at helping banks increase lending levels against the backdrop of the worsening crisis in the eurozone. The new scheme could support up to £80bn of new loans many of which are earmarked for small businesses looking to expand.

The Bank of England suggested the funding for lending scheme could be in place within a few weeks. If this works in the UK, perhaps it would be wise for the regulators to revise the way banks across Europe are allowed to lend to SMBs to ensure a level playing field and support trading with companies overseas.

With the deadline for Basel III looming and threatening to add to the burden of new regulation for SMBs, it’s important government tailor these for smaller organisations in order to avoid unhelpful and unwelcome consequences.

With reports on struggling Eurozone economies abounding and news continuing to warn industry of the repercussions on financial systems, you would expect the SMB sector to be particularly vulnerable to the knock on effects. Afterall they make up one of the parts of the economy that traditionally rely on banks for access to capital. It’s interesting then to note the results from Sage’s Business Index which shows only 19 per cent of the 10,000 plus small businesses polled citing lack of funding/access to capital was a problem.

Could it be that the SMB sector has simply learned valuable survival skills from the last financial meltdown and this time feel more prepared? With 69 per cent of small businesses polled for this second Business Index reporting revenues had either held steady or had grown over the last six months, despite fears this would not be the case– it would seem so, with the single exception of Spain where 44 per cent recorded a decrease.

According to this research, the biggest challenge faced by the majority of small businesses (47 per cent) in fact relates to rising costs – especially the cost of fuel and raw materials – a sure indicator that SMBs more than anything are looking at driving strategies of growth, innovation and sustainability that do not rely on bank lending practices.

Spain again stands apart with a quarter of Spanish small businesses citing lack of funding or access to capital, an indication that Spanish business owners are perhaps more reliant on banks to support growth and manage cash flow than in other regions.

Today the Eurozone hangs in the balance with doubts over whether the single currency will survive the storm, shepherding in the biggest challenge for Europe since the EU began.

All the more important to remember that in the Eurozone’s current predicament we are witnessing not an end but a beginning of new and different possibilities.