The financing of Maltese wholesale and retail business : an evaluation

Abstract

The need for finance arises for one basic reason, common to all decision taking units. It is that expenditure and income are not synchronized. Finance enables the arrangements to be made for bridging the time-gap between meeting the current expenditure and the future income receivable. Both the wholesaler and the retailer need financing, but not necessarily during the same stages in the life of a business. Throughout this dissertation an analysis and a comparison will be carried out of the methods of financing utilized and available to both the wholesale and retail sector in the three main possible stages in the life of a business. Setting up a business involves a start up stage where 'seed money' is needed to launch the business. Day-to-day transactions require various degrees of sources of finance both to wholesale and retail businesses. Growth stage can involve the expansion of existing stores (or outlets) and/or the increase in the number of stores (or outlets) where a capital outlay is normally involved. In conclusion, the study puts forward some recommendations and financial guidelines for the financial manager to consider when developing the business's financing portfolio, taking into consideration the awareness and use of alternative financing sources.