Re-evaluating the Supply Side of Finance Availability for Lithuanian SMEs
Keywords:finance availability, small and medium business, state intervention, business support measures
Finance availability continues to be one of the most significant challenges for the creation, survival, and growth of small and medium-sized businesses (SMEs), especially the innovative ones. As a result of 2008 financial crisis and the following economic downturn, there is a tense situation not only in SMEs but in all businesses financing volumes and conditions. The access to finance is recognized as a key challenge and a barrier for SMEs recovery in most of the countries.
The conditions of business finance availability from the supply side are re-evaluated in the paper, discussing the factors affecting finance availability for SMEs and the conditions of SMEs external financing with state intervention measures. Research results have revealed the easing general credit standards for Lithuanian businesses, but the demand is not yet met and is far from satisfactory. There have been various state intervention measures applied, but the promotion of mezzanine finance and equity or quasi equity guarantees are suggested.