SME Owners’ Financing Preferences

  • Ciarán Mac an Bhaird
Part of the Contributions to Management Science book series (MANAGEMENT SC.)


Academic studies investigating the financing of SMEs commonly examine the subject by conducting multivariate regression analysis employing panel data sets consisting of accounting and finance data (see Appendix B for a comprehensive review of this literature). Researchers adopting this approach seek to explain financing choice in terms of firm characteristics such as firm size, age, asset structure, profitability, growth opportunities, and legal organisation. This methodology, whilst beneficial in theory testing and preliminary benchmark studies, neglects one of the most important aspects of small business and entrepreneurship: the central role of the SME owner. Given the primary decision making role of the firm owner, this method excludes a fundamental element of the financing and finance provision in SMEs. The approach adopted in this chapter is to record SME owners’ views on financing their businesses, and the reasons why they choose one type of finance over another, or why they avoid some forms of financing entirely. Whilst this approach may appear self-evident or overly simplistic, it can reveal explanations for observed capital structures and how financial markets and institutions might better respond to the needs of the small business community.


Venture Capital Capital Structure Financing Decision Firm Owner Debt Finance 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2010

Authors and Affiliations

  1. 1.Fiontar Dublin City UniversityDublin 9Ireland

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