Chapter 7: A Qualitative Analysis
INTRODUCTION Winborg and Landstrom (2001) argue that financial problems (lack of funds) constrain the development and growth of SMEs because many are unable to access the same kinds of growth funding normally available to large businesses. This notion of a ‘finance gap’ within the SME sector has been supported by a number of researchers, for example: Berger and Udell (1998); Pissarides (1999); Becchetti and Trovato (2002); and Carter et al. (2003). It has also been suggested that the ‘finance gap’ might be even more acute for female-owned SMEs (Riding and Swift 1990; Breen et al. 1995; Brush et al. 2001). However, Riding and Swift (1990, p.327), note that while ‘[p]revious work reveals a pervasive perception that there is discrimination by bankers against women business owners’, this belief appears to be based on subjective perceptions without any ‘real statistical evidence’. Further, these ‘barriers’ to SME growth are generally believed to result from deficiencies in capital markets and include instances where SME owners’ loan applications are rejected together with instances where owners are ‘discouraged’ from applying for funding from a bank because they believe their application will be rejected (Kon and Storey 2003). For example, Levenson and Willard (2000) found that about 2% of US firms did not obtain the funding for which they had applied and approximately 4% of firms were ‘discouraged’ from applying for funding because they expected their request to be turned down. It seems, therefore, that twice as many US firms are ‘discouraged’ from applying for funding...
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