Market Gaps on Access to Finance - Bank of Valletta

More documents

Recommendations

Info

Malta Business Bureau – <strong>Market</strong> gaps in access to finance April 2013 2.4.2 Malta Enterprise support measures Malta Enterprise (ME) has been active in providing assistance to Maltese firms. In conjunction with the launch of the SBA in Malta, a one-stop shop was set up in 2012 to provide enterprises with access to 50 different government services. This business support centre, named Business First, is hosted at ME. In addition, ME has assisted SMEs through a mix of tax credits, loans, grants and a number of “access to finance” support measures (co-financed through the EU and/or national funds), including: Investment tax credits (Jan 2008 – Dec 2013) - credits are available to selected sectors 16 and provide tax credits to support investment and job creation, focusing on attracting new investment projects and promoting expansion or diversification of existing enterprises. The tax credits are calculated as a percentage of either the investment undertaken or the wage costs of new jobs directly created as a result of an investment project, with the applicable percentages for SMEs ranging from 40% (medium) to 50% (small). Soft loans (existing aid) – soft loans support enterprises through loans at low interest rates for part financing investments in qualifying expenditure, on the basis that the activities of a qualifying company 17 may contribute to the development of the Maltese economy as per the objectives of Government. The assistance represents up to 75% of qualifying expenditure, capped at €2.3 million, with minimum interest chargeable of 2.5% below the ECB base rate. Loan interest subsidy (existing aid) – this tool aims to help increase the competitiveness and innovative capacity of enterprises by supporting the acquisition of tangible and intangible capital assets that lead to a more effective and efficient production and supply of service/s. The maximum loan is capped at €7 million, with maximum interest subsidy of 3% on the bank lending rate. The same eligible qualifying companies as per the soft loans support measure apply. Loan guarantees (existing aid) – these guarantees facilitate access to finance to assist enterprises in the acquisition of capital assets that will lead to a more effective and efficient production and supply of service/s. The assistance can represent up to 75% of a loan taken up by a qualifying company to finance qualifying expenditure, and is capped at €2.3 million. Again, the same eligible qualifying companies as per the soft loans and loan interest subsidy support measures apply. Interest rate subsidy for hotels, accommodation facilities and restaurants (Oct 2010 – Dec 2013) - this scheme supports hotels, restaurants and holiday accommodation providers in upgrading their operations and product offering so as to provide new and improved services. These investments are necessary to enhance the competitiveness of such enterprises and upgrade the tourism sector. Such assistance is capped at €630,000 in the case of hotels, guesthouses and hostels, and €45,000 in the case of snack bars, restaurants and farmhouses. The interest rate subsidy varies from 1% to 3%. Energy efficiency loans (May 2011 – Dec 2013) – this scheme relates to soft loans (up to €400,000 covering up to 80% of the total eligible project costs) granted to hotels, guesthouses, hostels, farmhouses, snack bars and restaurants to implement energy saving solutions and to invest in solutions for the generation of energy from renewable non-fossil energy sources. The loan period is limited to five years and the applicable interest rate is 1.5% over the discount rate charged by local commercial banks. Equity Financing Programme (2009) – investor readiness programme to support local businesses with the development of their business proposals and to help with their initial investor search 18 . Tax credit for the development of digital games (2013) – a one-time tax credit equivalent to 100% of the total subcontracted costs incurred for the development of an eligible digital game, up to a maximum of €15,000 19 . 16 All enterprises engaged in manufacturing, ICT, R&D, eco-innovation and waste treatment, biotechnology, audiovisual productions, tertiary education in science and technology, private healthcare services, logistics operations by undertakings that create 50 new jobs (FTE), and that include part-transformation that adds value to the product. 17 All qualifying companies engaged in manufacturing, industrial services, biotechnology, call centre activities and R&D. 18 Times of Malta (2009), Equity financing for expanding companies Page | 14
Malta Business Bureau – <strong>Market</strong> gaps in access to finance April 2013 In addition, ME has implemented a number of grant schemes specifically targeted at SMEs, including 20 : ERDF Innovation Actions (Innovation and Environment) grant schemes 21 (Jan 2010 – Dec 2013) – these two schemes are available to selected sectors. The Innovation scheme aims to stimulate innovation within SMEs by supporting the development of innovative processes, products and services. The Environment scheme aims to support SMEs by supporting the adoption of environmentally friendly measures that go beyond legal requirements. ERDF e-Business Development grant (Jan 2010 – Dec 2013; no calls are currently available) – this incentive, available to selected sectors, is designed to assist SMEs to make better use of Information and Communication Technologies (ICT) to improve efficiency, add value to their products and services, and to innovate their processes. ERDF Small Start-up Grant Scheme (Jan 2010 – Dec 2013; no calls are currently available) – the scheme, available to new enterprises in selected sectors 22 having less than 50 employees, part-finances costs incurred by small enterprises in their first 3 years of operation. This scheme will support operational costs incurred during the setting-up period of start-up enterprises, including wage costs and rental or lease of equipment and production facilities. Innovative Start-ups Programme (May 2010 – Dec 2013) – this scheme is aimed at selected sectors 23 and relates to business ideas having the potential to develop an innovative product or service, and eligible companies may quality for support on start-up advisory services, business incubation, grants to cover costs related to investments in tangible and intangible assets, and access to finance. Micro Guarantee scheme (Jun 2012 – Dec 2013) – this scheme is aimed at facilitating access to debt finance required for the acquisition of tangible investments, intangible assets and working capital linked to such acquisitions, for smaller business undertakings employing not more than 20 persons. This scheme provides eligible undertakings with access to new loans of up to €100,000 which may be used to finance projects leading to business enhancement, growth and development. The scheme is made possible through the collaboration of participating banks that provide the loan facilities covered by the scheme at favourable conditions, subject to their own lending criteria 24 . ME does not require any security from the beneficiary in respect of the guarantee that will be issued to the bank. However, the bank granting the loan may require that the beneficiary secures up to 10% of the loan amount. Exploratory award (Sept 2010 – Dec 2013): this award supports SMEs in preparing technical dossiers to participate in EU funded programmes issued by the EC. The assistance provided supports the enterprises during the application process and covers the preparation and submission of technical proposals for projects under the EC’s Seventh Framework Programme (FP7) and the CIP. This award scheme provides assistance in the form of a cash grant and is applicable to selected sectors 25 . 19 MaltaToday (2013), €15000 tax credit for development of digital game 20 www.maltaenterprise.com 21 It should be noted calls for applications for assistance for a number of these (primarily ERDF) schemes are currently closed. 22 High value-added start-ups in manufacturing, ICT, RD&I, waste treatment and environmental solutions and biotechnology. 23 SMEs engaged in manufacturing, ICT development activities, R&DI, waste treatment, eco-innovations and environmental solutions; biotechnology and other start-up enterprises proposing innovative products and services. 24 Banks are not committed to lend on the basis of the Letter of Intent issued by ME. 25 SMEs engaged in manufacturing, maintenance, repair and overhaul of equipment, engines, plant and machinery, pleasure crafts and yachts, heavy equipment and aircraft; ICT development activities, software development and ICT enables services Page | 15
Page 2 and 3: Page | 2 Ernst & Young Limited Regi
Page 4 and 5: Malta Business Bureau - Mar
Page 58 and 59: Economic sectors Current financing
Page 60 and 61: Economic sectors Current financing
Page 62 and 63: Table 7: Mapping of financial instr
Page 64 and 65:
Lifecycle stage Current financing n
Page 66 and 67:
Few financial instruments were co-f
Page 68 and 69:
6.2.2 Agri-food processing firms De
Page 70 and 71:
6.2.3 Fisheries and aquaculture The
Page 72 and 73:
6.3 Best practice examples Followin
Page 74 and 75:
Structural Funds. Specifically, the
Page 76 and 77:
consideration the importance of “
Page 78 and 79:
6.3.5.1 Risk capital instruments su
Page 80 and 81:
6.3.6.5 Credit guarantees: In many
Page 82 and 83:
European Economic and Social Commit
Page 84 and 85:
D5 - How would you classify the cur
Page 86 and 87:
Please provide your comments for Qu
Page 88 and 89:
9. Appendix B: Survey (Maltese) Dan
Page 90 and 91:
B Normal day to day operations -ext
Page 92 and 93:
- Oħrajn (Speċifika) ____________
Page 94 and 95:
Q1 - Who are the owners of your fir
Page 96 and 97:
B: EU funds- Economic Sector Manufa
Page 98 and 99:
E: Trade Credit- Firm Size 1 - 9: M
Page 100 and 101:
G: Leasing/ hire-purchase/ factorin
Page 102 and 103:
A: National Grants/Pu blic aid C: B
show all

Market Gaps on Access to Finance - Bank of Valletta

Create successful ePaper yourself

Delete template?

Save as template?