An empirical study of optimal access to external finance by small and medium enterprise start-ups

Abstract

The aim of this study is to empirically examine the relationships between the determinants of start-up SME success, namely start-up awareness and management skills, and the finance suppliers. This study has proposed a framework that improves the ability of start-up SMEs to access external finance. Through descriptive and inferential statistical analyses of data from a survey of a sample of SMEs in South Africa, it was ascertained that the framework which maps the entrepreneur’s start-up awareness and requisite management skills with the finance providers’ requirements will make up a tool to assist start-up SMEs in developing optimal financing options to grow their businesses.

Challenges Facing ICT Use during COVID-19 Pandemic: The Case of Small, Medium and Micro Enterprises in South Africa

“…Many owners lack the business and ICT skills needed for SMME survival and sustainability, making it more difficult to meet growth requirements (Wendt et al, 2021). The start-up of SMMEs was assumed to have failed due to the inability to embrace "new normal" due to ICT challenges deepened by lack of funds and inherent factors (such as business size), lack of management skills and abilities, human qualities, financial conditions, and poorly implemented business plans (Bamata et al, 2019). Regarding the adoption of ICT during the COVID-19 pandemic, the ICT infrastructure of informal enterprises is poor.…”

Practical Risk Management Approaches among Small and Medium Enterprises

“…These risks include liquidity, funding, interest rate, pricing, credit, and so on. [17] underscores that financial risks are an offshoot of mismanagement that arises from poor judgment, miscalculation of events, and poor financial controlling. Relatedly, [18] claims that financial risk management falls under the umbrella of quality assurance.…”

Corporate governance: Theory and practice

“…In view of the above situation, the aim of this study is to investigate how start-up awareness (SUA), management skills (MS), and financial provider requirements relate to the primary drivers of business success in an experimental setting. A framework was developed to improve the ability of start-ups to secure external investment (Bamata, 2019). A simple random sample of 253 SMEs in Pietermaritzburg, South Africa, was used to collect data.…”

“…The results were obtained after evaluating seven hypothetical connections. The proposed framework connects a start-up entrepreneur's startup awareness and management skills with funding provider needs and provides an idea of the type and optimal funding options to be used for the business (Bamata, Govender, & Fields, 2019).…”