Survey: Entrepreneurs' opinion on the availability and diversity of financing in Latvia is improving, but caution in decision-making remains

When assessing business growth opportunities, development prospects, and the availability of financing over the next 12 months, entrepreneurs in Latvia describe their mood as cautiously optimistic. Although the availability of financing and the diversity of offers are no longer viewed as critically as in previous years, caution still dominates decisions on business development. This picture is reflected in the results[1] of a survey of entrepreneurs conducted by the local bank Signet Bank.

The survey also reveals positive tendencies in financial literacy – 51% of entrepreneurs have heard about alternative financing options, 21% plan to attract financing in the next 12 months, while 18% are considering changing their company’s financing bank. This indicates a decline in emotional attachment to a single bank and healthier competition in the financial sector, which provides entrepreneurs with a wider range of financing options.

Opinions on the availability of financing are becoming more positive year by year

Compared to the situation two years ago, entrepreneurs’ assessment of the availability of financing in Latvia has improved. While in 2023, 40% of entrepreneurs believed that it had become more difficult to receive loans or other financing, in 2025, only 25% expressed this opinion. At the same time, the proportion of entrepreneurs who believe that it has become easier to obtain financing has increased to 9%, which is 6% more than two years ago. Although this growth is not significant in percentage terms, it nevertheless marks a significant change in the overall business environment and the mood of entrepreneurs.

Most entrepreneurs plan to attract financing for the implementation of their development goals in the next 12 months – this is indicated by 70% of respondents. At the same time, 25% plan to use the financing to implement sustainability strategies, while 18% plan to use it to maintain their business, which has been affected by the geopolitical context of recent years. Despite the positive direction of business financing, the level of activity still lags behind the market potential.

The size and location of companies have a significant impact on financial readiness. Smaller companies and those operating outside major cities more often admit that their own resources are insufficient. Larger companies with at least 250 employees, on the other hand, more often indicate that investment needs can be covered by savings or existing bank loans.

The caution of SMEs is not a specific feature of Latvia. According to the Survey on the Access to Finance of Enterprises (SAFE) conducted jointly by the European Central Bank and the European Commission, in 2024-2025, SME caution regarding access to finance was mainly determined by high borrowing costs and uncertainty about demand developments. In addition, entrepreneurs were also affected by the geopolitical background, energy price sensitivity and increasing regulatory requirements, which encourage entrepreneurs to assess long-term commitments more carefully. Although the availability of financing has improved overall, entrepreneurs often choose to postpone investment decisions or finance growth gradually, maintaining reserves,

notes Roberts Idelsons, Chairman of the Board, Signet Bank.

Entrepreneurs’ opinions are influenced by a two-way barrier in thinking

Entrepreneurs who believe that it has become more difficult to obtain financing over the past year cite bureaucracy, a complicated application process, high requirements on the part of financial institutions, and uncertainty related to the overall economic and political situation as the main reasons.

Together, these factors point to a two-way barrier: on the one hand, a subjective perception of the complexity of the system, and on the other, real obstacles that require a response from policymakers or regulators. Of course, these factors do not directly restrict access to financing, but they do influence entrepreneurs’ willingness to take on long-term commitments,

says Ineta Done, Member of the Board, Signet Bank.

On the other hand, entrepreneurs who recognize improvements cite broader access to support programs – such as Altum and European Union funds – as well as growing competition among lenders, including in the non-banking sector, as their main arguments. As a result, some banks have become more responsive and flexible in their approach.

Entrepreneurs’ awareness of alternative financing options continues to grow

Awareness of alternative financing options continues to grow – 67% of entrepreneurs have heard about ALTUM programs, and 46% about the possibility of attracting financing from other Latvian or European Union support programs. The number of entrepreneurs who are aware of capital market financing options has also increased: 46% are aware of attracting capital from investors, 26% of bond issues, while 28% see the possibility of listing their company on the stock exchange in the coming years, which is 9% more than in 2023.

The capital market is no longer an unknown quantity

Survey data shows that in 2025, 51% of entrepreneurs have already heard about the financing opportunities offered by the capital market – this is the highest percentage ever. For comparison: in 2021, this number was only 29%, and in 2023 – 43%. Thus, over the last four years, entrepreneurs’ awareness of the advantages of the capital market has almost doubled, confirming a positive trend in the improvement of financial literacy.

In addition, 33% of the entrepreneurs surveyed indicated that they plan to use one of the alternative financing options in the next 12 months. This shows that market education and access to information are gradually translating into concrete decisions.

Despite awareness, only 39% have used at least one of the alternative financing options. More than half of respondents who have not used such solutions cite the fact that their company has not needed external financing as the main reason. At the same time, some entrepreneurs are convinced that traditional bank financing is enough – this figure has dropped by 3% since 2023 to 17%.

The capital market in Latvia has gradually evolved from a niche instrument into a real and understandable financing alternative for an increasingly wide range of companies. This is confirmed by both the growing awareness of entrepreneurs and the activity in the bond market in recent years, where historically better results were achieved in 2025 – records in both the amount of financing attracted and the number of companies that issued bonds. This development indicates a more mature business environment and the strengthening of long-term thinking in financial decisions,

conclude Roberts Idelsons.

[1] The survey was conducted in April 2025 in collaboration with Mindscan. It was participated in by 503 business owners, managers, and financial directors from the manufacturing, trade, construction, and service sectors across Latvia.