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.

On January 19th, the European Parliament approved a revision to the Waste Electric and Electronic Equipment (WEEE) Direction that means smaller retailers will now be obliged to collect small waste electric and electronic goods from consumers at no cost and without any requirement on the latter to buy a new product of the same kind in the shop.

The clause applies only to retailers with more than 400 square meters of sales area, for small WEEE items and unless an assessment shows that alternative existing collection schemes are likely to be at least as effective.

One European Association – UEAPME the European craft and SME employers’ organisation has already responded to the vote to say that while this is likely to exclude many micro and small retailers from collection obligations, other SMBs will nonetheless be clearly affected.

Over half of the SMBs polled in 2011 for the Sage Business Index about “The role of Government” put bureaucracy and legislation as the least favourable aspect of doing business in their country.

The general opinion is that restrictive legislation inhibits small business growth and certainly there has been a lot of hand wringing over the past couple of years about Europe’s productivity challenge.

Regulation that protects health, safety or the environment is welcome but the focus must be on those rules that make sense, add value and have an overall positive impact. In an already unforgiving trading environment – this revision of the WEEE directive feels like it will be prove a heavy responsibility in more ways than one.