Firms in Germany, where two domestic banks have fallen victim to the global credit crunch, still have ample financing, and many plan to increase investment in the coming year.
Banks have grown more willing to lend to German firms in recent years as industry has shaped up and profited from strong exports. The plight of lenders IKB and SachsenLB, near credit crunch fatalities, has not caused corporate lending to dry up.
Standards for company credit in the third quarter of this year, when the global liquidity crunch struck, were "generally almost unchanged" in Germany, the Bundesbank said last week in a report on its latest quarterly bank lending survey.
Crucially, the Mittelstand - the small- and medium-sized firms that form the backbone of the economy - sees no funds shortage. Mittelstand firms, mostly defined as those employing 500 people or fewer, account for 70 per cent of the workforce.
The fate of the Mittelstand is a major factor in determining the overall performance of the German economy, Europe's largest.
"The Mittelstand is not feeling anything at the moment in terms of a financing crisis, or even a credit squeeze," Mario Ohoven, president of Mittelstand association BVMW, told Reuters.
"Around a third of Mittelstand firms want to invest more in the next 12 months, only one in 10 wants to cut back," he said.
More than half of Mittelstand firms the BVMW surveyed said their financing situation was 'good' or 'very good'. Four years ago, just 20 per cent had the same view, said Ohoven, whose group represents over 150,000 firms with some 4.3 million workers.
Although the global liquidity crunch stemming from the US subprime crisis has tightened money market conditions, German banks have generally been able to carry on functioning and the trouble has not filtered down in a big way to corporate lending.
State-owned lender KfW said on Wednesday it was awarding an "extraordinarily high" amount of credit to firms, though it was hard to predict exactly how liquidity woes stemming from the US subprime mortgage market would impact financing conditions. ( Gulf )