The Role of Small Business in Lithuania. Support of Small Business in Lithuania and Abroad.

Topics: Venture capital, Business, Small business Pages: 23 (8004 words) Published: October 17, 2012
VILNIUS GEDIMINAS TECHNICAL UNIVERSITY

FACULTY OF BUSINESS MANAGEMENT
DEPARTMENT OF ECONOMICS AND MANAGEMENT OF ENTERPRISE

The role of small business in Lithuania. Support of small business in Lithuania and abroad.

Vilnius, 2011

Content
1.Introduction4
2.Small business in Lithuania5
2.1 Definition of what is small and medium business?5
2.2 Role of small and medium business in Lithuania. Its place in Lithuania‘s economies statistics5
2.4 The main requirements for getting financing in Lithuania: number of employees, size of turnover7 3.Financing small and medium business in Lithuania. Searching for the cheapest way8
3.1Financing business in commercial banks8
3.1.1Typical services in Lithuania’s commercial banks. Searching for cheapest8
3.1.2Comparing government guarantees and its conditions for loans in Lithuania and UK14
3.1.3 Searching for special offers in commercial banks17
3.2The cheaper alternatives of SME’s financing: Business Angels, trade credit, venture capital20 4.Financing small and medium business abroad. Finding cheaper ways23
4.1Comparing New Zealand’s and Lithuania’s government and banks role in helping small business23
4.1.1 Grants in New Zealand24
4.1.2 Commercial Banks in New Zealand vs. commercial banks in Lithuania26 5.Conclusions27
6.References29

1. Introduction

I have chosen topic “Small and medium business financing in Lithuania and abroad” because I think that for me, future manager it is really important. Before writing and searching information I thought that it is not so difficult to get credit if you want to start your business. In my coursework I will present the different ways of financing your business and also to prove that it is really difficult to get it, especially if you are new in business area. I will do that by showing how many documents, how many rules and requirements had to be fulfilled if you want to get a credit. In my coursework I have chosen to analyze 4 banks and their services, which are similar, also services that are exclusive in in each of banks. Banks I have chosen are: DnB Nord, Šiaulių bankas, Citadelė, SNORAS. Also I will give some suggestions how to get finance not from banks. I will present Business angels, trade credit. Moreover, in my coursework I will explain in detail what role small and medium business plays in Lithuania’s economy and I will provide some statistics, I will give requirements form small and medium business. And finally, I will shortly describe business financing abroad, in X country, which will be New Zealand. I will show, that even though, in 2010 this country won 1st place and was said to be the best place to start business, I will show, that initial capital from banks is hard to get. I will write about grants there and what kind of business they promote and give grants for. So, first of all, small business took the largest share of companies and is very important for each country. Often, it is even called the country's economy’s backbone. Development of small business in country reduces unemployment, increases the tax base, have an impact on overall GDP. It is therefore extremely important to encourage people to set up small businesses. One of the main things to do that is to provide more financial aid to small businesses. Our small country - Lithuania is not strong, well developed, there are no big investment companies to help develop business ideas, and most importantly - to help them financially. Therefore, the main source of financing for small business remains - bank, but during the 2008-2011 crisis revealed that the situation of small business and banking cooperation is really bad, during that time at all the banks refused to finance small business. Due to this fact in Lithuania many of small and medium companies bankrupted.

2. Small business in Lithuania
2.1 Definition of what is small and medium business?

It...

References: 1. Purlys, Č & Treigienė, D., 2006. Investment Management, Vilnius: Technika, p. 37-38, 65-66
2
3. Pabedinskaitė, A., 2008. New European challenges for small business prospective: The monograph, Riga: RTU Publishing House, p. 110, 111
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5. Bagdonas, E., Kazlauskienė, E., 1997. Biznio įvadas, 3rd ed., Kaunas: TECHNOLOGIJA, p. 126
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7. McLaney, E.J., 2006. Business finance: theory and practice. Harlow: Prentice Hall/Financial Times, p. 198
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11. Pierce, C., 2010. Business Funding [Online] (Updated 26 September 2010) Available at: http://www.businessfinance.com/books/workbook/BusinessFundingWorkbookTOC.htm [Accessed at: 20 March 2011]
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13. Wilson, N., 2001. Financing small music businesses in the UK. Cultural Trends, 11(41), pp. 93 – 122 (VGTU databases)
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15. Anon, 2008. Bank SNORAS presents a special Wages Programme to corporate companies [Online] (Updated 1 September 2008) Available at: http://www.snoras.com/lt/about/news?item=2020&print=1 [Accessed at: 10 March 2011]
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16. Anon, 2010. Service package “STARTAS”[Online] (Updated 6 November 2010) Available at: http://www.sb.lt/article/archive/221?durl=240fb3d0a8564643b5920f9cc6d5d03e [Accessed at: 11 March 2011]
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18. Vilkancas, A., 2008. DnB NORD bankas parengė nuolaidų paketą naujam verslui "Vitaminai startui" [Online] (Updated 8 July 2008) Available at: http://www.verslobanga.lt/lt/spaudai.full/487342e321425 [Accessed at 9 March 2011]
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20. Capper, D., 2011. Why is it easy to start business in New Zealand? [Online] (Updated 25 March 2011) Available at: http://www.quora.com/Why-is-it-easy-to-start-business-in-New-Zealand [Accessed at: 22 May 2011]
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22. Reserve Bank of New Zeland, 2011. New Zealand banks [Online] (Updated at: 1 February 2011) Available at: http://www.rbnz.govt.nz/nzbanks/ [Accessed at: 20 May 2011]
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24. Birutis Š., 2001. Smulkaus ir vidutinio verslo finansavimo galimybės Lietuvai stojant į ES [Online] (Updated at: September 2001) Available at: http://www.verslobanga.lt/lt/leidinys.full/3c10bc1a89e0c [Accessed at: 10 March 2011]
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28. Pusvaškienė, L., 2010. Verslo Angelų Fondas I [Online] Available at:
http://www.mesinvest.lt/index.php/verslo-angelu-fondas-i/53 [Accessed at: 14 April 2011]
29. Invega, 2009. Garantijų teikimas SVV [Online] Available at: http://www.invega.lt/en/ [Accessed at: 18 April 2011]
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[ 1 ]. Pabedinskaitė, A., 2008. New European challenges for small business prospective: The monograph, Riga: RTU Publishing House
[ 2 ]
[ 10 ]. Pusvaškienė, L., 2010. Verslo Angelų Fondas I [Online] Available at: http://www.mesinvest.lt/index.php/verslo-angelu-fondas-i/53 [Accessed at: 14 April 2011]
[ 11 ]
[ 12 ]. McCallion, R. & Warner, A., 2009. Cash flow for small businesses, 2nd ed., Vilnius: Conto litera
[ 13 ]
[ 14 ]. Anon, 2011. Business grants for Kiwi businesses [Online] (Updated at: 7 March 2011) Available at: http://www.business.govt.nz/starting-up/where-to-find-sources-of-capital/business-grants-for-kiwi-businesses [Accessed at: 22 May 2011]
[ 15 ]
[ 16 ]. Reserve Bank of New Zeland, 2011. New Zealand banks [Online] (Updated at: 1 February 2011) Available at: http://www.rbnz.govt.nz/nzbanks/ [Accessed at: 20 May 2011]
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