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There was a question in June 2016 exam which was
Discuss two ways in which small- and medium-sized entities
(SME) could raise finance in order to overcome the funding gap and the maturity gapI want to know what is funding and maturity gap the difference between them.
In Your lectures i have learned that small companies can raise finance by a wealthy friend or bank loan. AIM. Will that be enough to mention in this question?
Funding gap is the difficulty in raising finance for smaller businesses.
Maturity gap is the difference between the life of the assets of the business and the length of the loans used to finance them.AIM is certainly important to mention. With regard to wealthy friends and bank loans, you would get some credit but these are really only relevant for very small businesses – not for medium sized ones. Another good one to have mentioned would be venture capital (which is effectively the same as business angels, but companies rather than individuals).
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