Obstacles to the development of businesses in attracting additional capital

The results of the survey carried out in September indicate that nearly 15% of Estonian entrepreneurs perceive problems in raising the necessary capital. This is more of an obstacle for medium-sized companies with 50–249 employees (21%), with insufficient collateral and equity financing being the main concerns.

According to Ivo Kuldmäe, the Head of KredEx, Estonian companies have coped well with the crisis, however, the recent survey clearly shows that there will also be a need for support among start-ups as well as among companies already strongly operating in the market. ‘Entrepreneurs have said that they expect KredEx to continue to make start-up capital available to start-ups and to provide development and investment support and suretyship to existing companies,’ Kuldmäe said.

Awareness of the services offered by KredEx among entrepreneurs is generally high, with the most well known being the suretyship for loans granted by banks, followed by start-up loans, credit insurance, and export loans. Based on the survey, entrepreneurs mostly expect support in the future in the form of start-up grants and flexible suretyship as well as loan conditions.

‘In a changing economic environment, the need for business advice has clearly increased. In addition to banks, in the context of the growing demand, KredEx has started to offer a comprehensive consultation service to map the plans, problems, and expectations of entrepreneurs and, based on this, offer additional development support through state measures,’ the Head of KredEx said, adding that this will help to mitigate the risks of companies and improve access to capital.

According to the survey, more than one-fifth, or 22% of the entrepreneurs expect to be contacted by a KredEx account manager and receive an in-depth consultation. This is somewhat truer for medium and large companies and especially for the industrial sector.

Aided awareness of KredEx as a financial institution is 91%, which is not significantly different from the results of previous surveys.  For entrepreneurs, KredEx is most associated with four areas: loans, leasing, financing; apartment buildings, apartment associations, renovation of real estate; suretyship, collateral, guarantee; grants and financial aid.

As commissioned by KredEx, RAIT Faktum & Ariko carried out a survey among 400 Estonian entrepreneurs in September this year to find out their attitudes and opinions concerning financing, its opportunities, and KredEx.