Financing practices and preferences for micro and small firms

摘要

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.