As I have written in the past, the cost of capital is now on the rise, as central banks have to tighten monetary policy i.e. increase interest rates, to dampen demand as part of its fight to tame inflation.

The bond markets have already reacted to this. As can seen below the yields on both a 10-year Malta Government Bond and a German Sovereign Bond have increased drastically, standing today at around 3.5% and 2.3%. This means that Corporate Bond Issuers will need to offer much higher coupon rates, to adequately reward investors for the risk premium beyond the above mentioned risk free rates.

Moreover, as we all know, bank financing is now based on variable interest rates, many times based on rates above the Euribor base rates. This means that as the Euribor rates increase, the overall cost of bank financing will also increase.

I believe that all this shows the importance that EU funding can play for SMEs. When SMEs look at investing to grow their business, EU funding could be a possible way of reducing the financial outlay and hence reducing the costs of financing.

Thus, I strongly advise SMEs and family businesses to attend an information session on new EU funding schemes on the 31st May at 9am, whereby these newly EU Funded Schemes will result in circa €75M of EU Funding for the private sector.

During this event information will be given as to how businesses can access this funding and present successful applications. This session will be augmented with real life case studies and practical dos and don’ts of a successful application, whilst providing a good overview of the type of investment that can be eligible for EU funding

Click HERE to learn more on this event and to register.