Debt Financing and Factors Internal to the Business

In an effort to minimise the finance gap in small businesses and to take advantage of the opportunities it offers, governments and private agencies have increased their supply of funds to the small business sector over the last decade (Hughes, 1997). The literature contains several references to funding programs targeted specifically at small and medium businesses. However, small business owners continue to cite inadequate finance, particularly long-term debt finance, as a major constraint to growth (Binks and Ennew, 1996) and a major cause of failure (Davidson and Dutia, 1991).