Every day, SME owners demonstrate remarkable resilience, resourcefulness, and ambition, yet they’re under continued pressure to keep pace with a changing business landscape.

This means that now more than ever, understanding the challenges they face and the opportunities ahead is critical.

Our latest research sheds light on the most pressing issues facing Europe’s small business owners and reveals where targeted support, innovation, and practical action can make the greatest impact in building a more resilient future.

From funding gaps and digital transformation to cybersecurity threats and sustainability expectations, we must ensure every small business has the tools, resources, and confidence to thrive, today and tomorrow.

Here’s how we can work together to future-proof Europe’s SMEs for lasting success.

Access to capital

Securing initial funding remains the single biggest hurdle facing 30% of European SME owners when starting their business. When it comes to scaling, nearly a third (31%) say that better access to grant funding would make a meaningful difference.

In fact, 41% agree it’s harder than ever to acquire business funding, a figure that rises to nearly 50% in countries such as Norway, France, and Greece.

Traditional lending models, often built for large corporations or individual consumers, aren’t keeping pace with the evolving needs of modern SMEs.

Many founders are focused on immediate survival, like making payroll for a small team, rather than navigating complex credit systems.

We must work hand in hand across the ecosystem to make small business lending more accessible, more efficient, and faster, and at Mastercard, we’re doing just that to power new products and services that expand access to capital through open finance.

Embracing digital transformation

Digital transformation can be a game-changer for small business growth, and in today’s digital-first environment, supporting their journey into the digital economy is no longer optional, it’s essential.

Yet for many SMEs, the shift still feels overwhelming.

One in five small business owners across Europe would benefit from greater confidence using digital tools, and whilst AI continues to gain ground, with 40% having increased their use of AI since it became more conversational, over half of SME founders see its potential but aren’t using it yet.

That’s a missed opportunity. Whether it’s automating administrative tasks, using agentic AI assistants, enhancing customer service, enabling customers to pay with a tap or embedding payments in e-commerce platforms, the right digital tools can help SMEs scale smarter and faster.

Building digital confidence doesn’t mean mastering every emerging technology. It means starting small and investing in or leveraging the right platforms.

Through our trusted network, we’re providing small business owners with access to the cutting-edge solutions they need to embrace a digital future.

Well ahead of our 2025 target, in October 2024, we met our goal of bringing 50 million small businesses into the digital economy. Through inclusive programs like Start Path and Mastercard Strive, we also empower SMEs with access to digital training, mentorship, and expert guidance.

Prioritise cybersecurity

As digital tools become more central to day-to-day operations, SMEs are increasingly targeted by cybercriminals, but many lack the resources to effectively defend themselves. One in two (47%) of small business owners are unsure how to protect themselves from cyberattacks, and therefore raising awareness, simplifying protection, and making the right tools accessible is essential.

Whether it’s securing customer data, preventing fraud, or safeguarding online payments, building a strong digital foundation isn’t just about defence, it’s about creating trust, stability, and resilience for long-term growth.

That’s why we’re collaborating with experts and investing in innovative solutions that strengthen simplify and educate around cybersecurity, so small businesses owners can focus on what matters most – serving their customers.

Make sustainability actionable

Sustainability is increasingly top of mind for small and medium-sized enterprises.

Seventy-two per cent of SME founders are actively working to make their business more sustainable, and 77% believe that building a sustainable business is the key to future-proofing it.

SMEs in Portugal are particularly passionate. The majority (88%) are actively working to make their businesses more sustainable, and 77% already have policies in place.

It’s great to see, especially as sustainability isn’t just good for the environment, but it can also drive long-term business success.

However, barriers remain, and 42% of SME entrepreneurs say they simply don’t have the time to focus on sustainability, with 45% citing cost as a major hurdle.

It’s time to change that narrative.

Today, digital tools are making it easier and more affordable than ever for SMEs to take meaningful action. From tracking carbon emissions and reducing waste, technology can help SMEs take control of their sustainability journey.

Even small, scalable changes like switching to digital receipts, adopting paperless invoicing or embracing rental or reuse programs can make a significant impact.

By integrating sustainability into day-to-day operations, SMEs can drive growth while building a more secure, competitive future.

Supporting SMEs isn’t just about enabling transactions, it’s about fuelling transformation.

At Mastercard, we’re proud to stand beside Europe’s small business entrepreneurs, offering the tools, insights and partnerships they need to succeed.

Together, we can ensure a future where our SMEs are empowered to grow, adapt, and thrive.