Sources of short-term finance and their utilization in selected Maltese public limited companies

Abstract

This study aims to examine the relationship between the sources of short-term finances available for local public limited companies and its utilization. The key research objective of this study is to identify types of short-term sources of finance their utilization and manner of repayment in selected Maltese public limited companies.

Interviews were conducted through personal interviews with fourteen local Public Limited

Companies from different industries.

Short-term finance sources have experienced significant developments over the last few years. Public Limited Companies has been using only two sources of short-term finance in the past decade. In year 2004 local companies are relatively aware of short-term finance sources and the study shown that the corporate use of short-term sources has relatively increased from two to five short-term finance sources.

The study shows that most of the public limited companies use short-term sources correctly for working capital purposes, but sometimes incorrectly for capital investments. The study has also proposed a number of possible improvements and developments to the current situation which should make sources more accessible. The main developments suggested are the introduction of discount houses by the local commercial bank or the availability of factoring and refinements to the current sources.