How do small businesses get funding

European Commission definition of SMEs

Micro, small and medium-sized enterprises (SMEs) are defined in EU Recommendation 2003/361. According to this, a company counts as an SME if it has no more than 249 employees and an annual turnover of no more than € 50 million or a balance sheet total of no more than € 43 million.

EU SME thresholds since 01/01/2005

Company sizeNumber of employeesandSales € / yearorBalance sheet total € / year
smallesttill 9 to 2 million to 2 million
smallto 49 up to 10 million up to 10 million
mediumto 249 up to 50 million to 43 million
(SMEs) togetherbelow 250 up to 50 million up to 43 million

These thresholds apply to sole proprietorships. In the case of a company that is part of a larger group, the number of employees and the turnover or total assets of the group must be taken into account, depending on the level of participation.

The demarcation of an SME according to the EU Commission's SME definition is important for access to finance and EU funding programs that are specifically geared towards these companies.

For statistical / empirical analyzes, the SMEs are usually delimited according to the number of employees or the turnover:

  • Small business: up to 9 employees and a turnover of up to € 2 million / year
  • Small company: up to 49 employees and a turnover of up to € 10 million / year and not a small company
  • Medium-sized company: up to 249 employees and up to 50 million € turnover / year and no small or small company

The links between SMEs and other companies cannot (yet) be taken into account in the official statistics.