MBA Innovative Management
Abdul Hameed Muhamad Jazeem
SOURCES OF FINANCE
• Introduction of SMEs and its Importance for Finance
• The challenge of SME’S Raising Funds
• Barriers for the SME growth
• Further Readings
I have chosen the Small Medium Enterprises (“SME”s) as my chosen sector in order to review the sources of finance for this assignement.
First of all let me introduce about the SMEs.
SME’s can be defined as having three main characteristics:
• Companies are not quoted on a stock exchange – they are “unquoted”
• Ownership of the business is typically restricted to a few individuals. Often this is a family connection between the shareholders
• Many SME’s are the means by which individuals (or small groups) effectively achieve self-employment
The SME sector is a vital one in the UK economy. In 1999, the Department for Trade and Industry (DTI) estimated that there are 3.7 SME businesses in the UK. Sole traders account for the majority of the businesses in the UK (63 per cent) but a smaller proportion of the number of employees (23 per cent) and an even smaller proportion of turnover (9 per cent). As a proportion of all businesses in the UK, SME's account for some 55 per cent of employment and 45 per cent of turnover.In order to success in the business these SMEs need financial support to grow.
So, finance is the back bourn of any business; it’s needed for business to survive and growth. Finance for the business can be internally which is generated form with in the firm and externally which is obtained from the out side parties. In most of the developed countries external finance play major role in the business and business mainly relay on external finance. But in most of the developing countries...