Possibilities for Business Enterprise Support

Abstract

Small or medium size enterprise (SME) is one of themost important economics growth factors having the basicimpact on the general development of the country’s economyand social stability, creation of new work places, therefore itsdevelopment is one of the most important country’s economicpolitics’ trends.In the theoretical part of the article there have beenidentified two scientific approaches towards SME‘ support.Some scientists think that the SME’s support isunjustifiable, because government intervenes into thedictated processes of the market and violates them, but theother part claims that the SME’s support politicsimplemented by the government helps to solve businessand economics’ problems. Both sides have their ownarguments, but those are more marginal approaches.Currently, the Lithuanian government supports SME’sstimulation, support and versatile help, but in reality dueto financial resources' lack small or medium sizeenterprise is maintained according to resources.When Lithuania became the EU member, thereemerged more possibilities for small or medium sizeenterprises, opening new vistas for business people. Anumber of the provided projects shows that the requiredsupport sums are exceeding funds possibilities. Thereforeit is important to base the need for the support of aparticular company.In the article there have been analyzed the EuropeanAgriculture and Guarantees’ Fund (EAGF) requirements,which the enterprise must correspond in order to get theEAGF support. One of the main requirements is thateconomic vitality rates (general liquidity rate, the netprofitability, loan repayment rate, loan rate, the internalrepayment rate, the average asset profitability)corresponded to the set critical values.In the investigative part of the article there have beencarried out the activity development analysis of the JSC“Kaimas” in order to get the support of the EAGF. Whilevalidating the support’s need there has been oriented toeconomic vitality rates and their impact on the company.There has been carried out the analysis of the plannedeconomic activity, risk factor and financial commitments.The need for additional financial support has been alsoanalyzed. There has been estimated that investments couldbe financed from private, loan’s and the EU support funds.There have been grounded the company’s manufacturingequipment modernization possibilities while purchasingthe needed long-term assets. There has been estimated thatpart of the company’s production is to be exported. It isforecasted that manufacturing outlays (materials, energy)would increase 10 per cent annually. The company loanservicing, economic vitality and investment effectiveness,and manufacturing self-cost statistical tables have beenprepared.The analyzed main economic enterprise rates allow toclaim that the project is viable and financially useful andpaying off. The received economic vitality rate values arebetter than the critical values; therefore, JSC “KAIMAS”is a suitable applicant for the EAGF support. The carriedout calculations show that the forecasted activityprograms’ implementation will guarantee that the activitywould be profitable and will allow to implement theallocated investments for economy modernization.