Strapped for cash? Funding for UK high growth SMEs since the global financial crisis
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While high growth firms (HGFs) are crucial drivers of economic growth, to date there has been a dearth of research examining their funding requirements. Drawing on a survey of over 8,000 UK Small and Medium Sized Enterprises (SMEs), this paper investigates the capital structure and access to credit in high growth SMEs in the period following the global financial crisis. The findings challenge conventional wisdom about high growth SMEs in certain respects. They find it no harder than non-high growth SMEs to access external finance. The vast majority of high growth SMEs rely strongly on debt-based finance for their funding, not equity finance. High growth SMEs are much less likely to seek finance for working capital purposes but are no more likely to seek finance to invest in R&D than less rapidly growing SMEs. The findings suggest little justification for government intervention aimed at increasing credit availability for HGFs as currently espoused by the UK government.
Brown , R & Lee , N 2019 , ' Strapped for cash? Funding for UK high growth SMEs since the global financial crisis ' , Journal of Business Research , vol. 99 , pp. 37-45 . https://doi.org/10.1016/j.jbusres.2019.02.001
Journal of Business Research
Copyright © 2019, Elsevier Inc. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.1016/j.jbusres.2019.02.001
DescriptionThe authors wish to thank the Institute for Chartered Accountants Scotland (ICAS) and the Scottish Accountancy Trust for Education and Research (SATER), now known as the ICAS Foundation (charity registered in Scotland SCO34836) for funding the research reported in this paper.
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