Figure 6 - SME Growth and Financing Continuum

• Very small firms - Little or no collateral and no track record
  • Initial Insider Financing
  • Angel Capital
  • Trade Credit
  • Short-term loans
• Small Firms - Some growth potential, but often with limited track record
  • Initial Insider Financing
  • Angel Capital
  • Institutional Venture Capital
  • Trade Credit
  • Short-term Loans
  • Intermediate and Long-Term Loans
  • Mezzanine Financing
• Medium-sized Loans - Some track record and collateral available if nessary
  • Institutional Venture Capital
  • Public Equity
  • Trade Credit
  • Commercial Paper
  • Short-term Loans
  • Intermediate and Long-term Loans
  • Medium-term Notes
  • Pricate Debt and Equity Placements
  • Public Debt
• Large Firms - Well-known risk and track record
  • Public Equity
  • Trade Credit
  • Commercial Paper
  • Short-term Loans
  • Intermediate and Long-term Loans
  • Medium-term Notes
  • Private Debt and Equity Placements
  • Public Debt

Sources: CLMPC - adapted from original figure for U.S. capital markets, Federal Reserve System, Washington D.C., 1998.

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