Financing practices and preferences for micro and small firms

Nikolaos Daskalakis (Small Enterprises Institute (IME‐GSEVEE), Athens, Greece)
Robin Jarvis (ACCA, London, UK and Brunel University, Middlesex, UK)
Emmanouil Schizas (ACCA, London, UK)

Journal of Small Business and Enterprise Development

ISSN: 1462-6004

Publication date: 15 February 2013

Abstract

Purpose

The aims of the paper are three‐fold: first, to analyse how small and micro firms finance themselves; second, to investigate what their financing preferences are; and third, to explore their opinions on how they evaluate the financing sources and the various obstacles they face in accessing those sources.

Design/methodology/approach

The paper uses a sample of Greek small and micro firms, which cover 99.6 per cent of the total number of firms operating in Greece. The data are derived from the answers in a structured questionnaire.

Findings

The main conclusions are as follows. Regarding equity financing, firms rely heavily on their own funds and would not raise new equity from sources outside the family; thus, there is a reluctance to use new outside equity (venture capital, business angels, etc.). Regarding debt financing, firms denoted that they would use more debt, specifically long‐term debt, than they currently do. Thus, there are limitations in accessing long‐term debt financing. Regarding grant financing, micro and small firms should be better informed and encouraged more to participate in state grants and co‐financed programs; thus, there is an informational gap in grant financing.

Originality/value

The paper uses a sample of Greek micro and small firms and a survey methodology to tackle the lack of quantitative published data for most small firms in Greece. It incorporates distinct sources of funds that are very important for small firms (family funds, grants provided by the state and micro‐loans). It investigates preferences, not just practices.

Keywords

Citation

Daskalakis, N., Jarvis, R. and Schizas, E. (2013), "Financing practices and preferences for micro and small firms", Journal of Small Business and Enterprise Development, Vol. 20 No. 1, pp. 80-101. https://doi.org/10.1108/14626001311298420

Download as .RIS

Publisher

:

Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

Please note you might not have access to this content

You may be able to access this content by login via Shibboleth, Open Athens or with your Emerald account.
If you would like to contact us about accessing this content, click the button and fill out the form.
To rent this content from Deepdyve, please click the button.