Market Gaps on Access to Finance - Bank of Valletta

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Malta Business Bureau – <strong>Market</strong> gaps in access to finance April 2013 Figure 11: Interest in applying for sources of finance A: National Grants/Public aid The following table shows the distribution of respondents and their take up for the various sources of finance, analysed by firm lifecycle: Table 5: Respondents that were interested in types of finance, distributed by lifecycle Start- Emerging Domestic Expansion- Total Source of finance / Lifecycle stage up growth growth growth A: National Grants/Public aid 80% (8) 75% (3) 84% (63) 85% (11) 83% B: EU funds 80% (8) 75% (3) 81% (61) 85% (11) 81% C: Bank overdraft, credit line or credit cards overdraft 40% (4) 75% (3) 65% (49) 38% (5) 60% D: Bank Loans 50% (5) 50% (2) 63% (47) 54% (7) 60% E: Trade Credit 50% (5) 25% (1) 63% (47) 62% (8) 60% F: Other loan 30% (3) 50% (2) 32% (24) 15% (2) 30% G: Leasing/ hire-purchase/ factoring 60% (6) 0% (0) 47% (35) 54% (7) 47% H: Equity from other Sources 50% (5) 0% (0) 21% (16) 23% (3) 24% I: Public issue of own shares or own bonds B: EU funds C: Bank overdraft, credit line or credit cards overdraft D: Bank Loans E: Trade Credit F: Other loan (e.g. related company/ shareholders, … G: Leasing/ hire-purchase/ factoring H: Equity from other Sources I: Public issue of own shares or own bonds Base: percentages based on total responses in each lifecycle 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 40% (4) 0% (0) 11% (8) 8% (1) 13% Firms at the two extremes of the firm lifecycle (start ups and expansion growth firms) were less interested in bank overdrafts (40% and 38% respectively, average of 60%), while start-ups were more likely to favour equity (50%, average 24%). In terms of sectors, the Life Sciences and ICT industry showed the highest interest in equity financing from other sources and through a public issue (64% and 36% respectively, compared to averages of 24% and 13%). 5.2.7 Q5: What is the size of the last loan, of any kind, that your firm has obtained in the last two years? 13% This question asked respondents to provide an indication of whether they have taken a loan in the last two years and, if yes, the size of such a loan. Given the confidential / sensitive nature of this question, 3% of respondents chose not to provide an answer to this question and the subsequent 24% Page | 52 30% 9% 47% 60% 60% 60% 12% Yes Don't Know No %age of Respondents 10% 83% 81% 4% 5% 3% 78% 9% 60% 65% 49% 5% 6% 35% 31% 37% 12% 13%
Malta Business Bureau – <strong>Market</strong> gaps in access to finance April 2013 question. In addition, 31% of firms who have used bank financing in the past had not obtained a loan within the indicated timeframe, while another 35% had never obtained a loan. 35% of actual respondents to this question had obtained a loan in the range between €100,000 to €1 million. An almost equal amount of responses mentioned the next lower bracket (€25,000 - €100,000) and loans greater than €1 million (14% of responses each). Figure 12: Size of loan Base: All respondents As expected, smaller firms tended to opt for smaller loans; 42% of loans from “micro” SMEs were less than €100,000 (average: 13%), while “medium” SMEs were more likely to opt for loans with a value higher than €1 million (47%, average: 9%). 5.2.8 Q6: What did you use this last loan for? The next questions asked respondents to provide the reasons for taking up the above-mentioned loans. The figure below shows the number of occurrences in which a loan was taken and used for the respective categories. As shown in the figure below, loans were mostly used for acquiring/ investing in fixed assets. Figure 13: Use of last loan Number of Respondents No loan in the last 2 years 31% 20 18 16 14 12 10 8 6 4 2 0 €>1M 14% Base: Respondents that used a loan €
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Market Gaps on Access to Finance - Bank of Valletta

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