EU funding opportunities for SMEs in Malta : an analysis

Abstract

This dissertation consists of an overview of the types of EU funding opportunities available to SMEs in our country, an analysis of their implications and benefits, and an assessment of their potential. EU funding programmes can be direct or indirect. Direct funding is that managed by the European Commission and is mostly thematic in nature such as FP6. Indirect funding consists of programmes that are managed and selected at national or regional level and processed through financial intermediaries such as Loan Guarantees and Structural Funds. The respondent SMEs used EU funds to co-finance capital expenditure for the purchase of new machinery and equipment and to carry out research. Participation in the FP6 offers invaluable experience through networking with other larger, established and renowned companies from countries in the EU, Asia, and Africa. Benefits of EU funded programmes consisted of an improvement in the operating processes leading to savings in costs, reduction in noise pollution, improved financial position, creation of more innovative products, diversification of operations, and improved competitiveness. Participation in EU funded programmes enabled the enterprises to carry out different projects simultaneously. The company's reporting structure is not given much importance in granting decisions. The accountant may provide past information about the financial position of the company, compute the necessary calculations and forecasts, fill the application form, and draw up the business plan. The availability of different stages of capital financing for the right ventures is still underdeveloped in Malta and SMEs still depend predominantly on the entrepreneur's own funds and on bank finance. New opportunities such as EU funding help SMEs to access finance through new and improved ways. Successful implementation of EU funded projects is possible for small companies, as long as they find assistance in choosing the right programme, projects and partners, and they are willing to exploit the opportunities provided by EU funds for SMEs.