Small and Medium Sized Scale Enterprise (SMEs) Finance Sources and Difficulties

Mezzanine debt is used by companies that are cash flow positive to fund: further growth through expansion projects; acquisitions; recapitalizations; and, management and leveraged buyouts. When mezzanine debt is used in conjunction with senior debt it reduces the amount of equity required in the business. As equity is the most expensive form of capital, it is most cost effective to create a capital structure that secures the most funding, offers the lowest cost of capital, and maximizes return on equity. Mezzanine debt has been around for over 30 years, however its use in Western Canada and the

Mezzanine financing is an unsecured debt instrument that sits between senior secured debt and common equity in a company's capital structure. Mezzanine financing is generally not used to fund day to day operations; rather, it is primarily used by companies experiencing a significant transition event, whether through rapid organic growth (introducing new product/service lines, expanding geographically), making a strategic acquisition, or effecting a change in shareholder composition (management buyout, leveraged buyout, recapitalization). These situations may require extra financing above and beyond what senior secured debt alone can provide, especially in cases where collateral is limited; mezzanine financing allows shareholders to execute

Conclusion: This paper is intended to give clarity on the depths of small businesses, how they plan to succeed and get through possible adversity. The surviving mechanism it takes to maintain in a world where large businesses are expected to exist longer than small business.

Angel investors help people in startup new business. Capital come at cost and for those Angel investors makes arrangement by overcoming these issues. These issues including ownership, rate of return expected from investment and making arrangement of the desired amount. This all kinds of needs are difficult for the new entrepreneur to manage which is then offered by Angel investors. Therefore Angel investor’s helps in defining success for the new entrants by helping them create new jobs, new market, assisting in establishing comfortable size and scale and inventing methods for reaching out to a successful business.

For an angel, the return comes through an exit strategy rather than waiting on for the profits to start rolling in from sales.

It was important to carry out research on the determination of financial strategies for women-owned small businesses in Florida. Therefore, this research will include studies and combination of research work, to contribute to relevancy for this dissertation (Adkins et.al, 2013). Admittedly, the small business enterprise ought to consider making an exhaustive examination of open markets, by how much the SME can permit to be hazard avoidance, what objectives they need to achieve (both short-term and all the more vital long haul), not to mention that they ought to remember their financial plan. What 's more, Polish economy development is profoundly connected to the execution of SMEs, which is appearing on the exhibited outlines. Besides, it is not diverse in the state of Florida as well, and the circumstance is the same all over the place on the planet. In this way, after numerous changes,

Venture Capital is one of the fastest emerging sources of finance for new entrepreneurs. In spite of its increasing popularity, funding via Venture Capital is faced with a number of difficulties. Thus, it is important to study the various aspects of raising funds through Venture Capital.

Financing options could include an angel investor. In this domain, the entrepreneur receives funding through an independent resource who defines the terms and affords alternative repayment plans (Mikic et al., 2016). The angel investor can involve a leading individual within a mainstream corporation or independent person of wealth (Kuratko, 2014). The distinction is that this individual has the fiscal resources available to diversify and invest into

Investors play a significant role in enhancing the growth of enterprises all over the world. As the world continue to experience emerging challenges and opportunities, the number of emerging entrepreneurs continues to rise as well. Even though some of these budding businesspeople have a financial base from which they launch their new ventures, a majority do not have identifiable sources of funds. Therefore, this group of unlucky entrepreneurs is always seeking out successful and sophisticated investors who are always willing to invest in new promising start-ups. However, the catch is that the budding businesspeople seeking partners and funding must first and foremost do a pitch, where

Venture capital (VC) refers to financial intermediary between institutional investors and private companies, often to finance new ventures or growth of private companies. Venture capital is a subset of the larger private equity industry, which refers to equity investments in privately-held enterprises. VCs are different from angel investors, who are often erroneously considered the same as VC, in that VCs rely on raising a pool of capital from limited partners (LP), and invest on their behalf as general partners (GP), via a limited partnership that is the actual fund (VC firms often manage several funds). The limited partnership model define certain characteristics of VC

The benefits of VC is not only financial, investors provide an important strategies and guide to success.

This paper investigates the financing process of tech startup firms, their potential financing sources, how they make financial decisions and how they build the capital structure, with special emphasis in Chinese entrepreneurs’ perspective. The applicative of pecking order theory in tech startups financing. China has a fast growing economy, which tech startups contributes a lot. This research can provide a better understanding of entrepreneurs’ financing strategy.

We realize that SME’s are crucial for UK economy, In first quarter of 2013 there were around 4.9 million businesses were private, among those 99.9 % were SME’s. Almost 44% of SME’s are using external finance; reportedly bigger SME’s are using more external finance.

Based on a survey of 139 banks in 16 countries, Rocha et al (2011) investigated the status of financing to SMEs in the Middle East and North Africa (MENA). The researcher found out that in spite of a good and viable environment which prompted the growth of the segment, the SME sector in these region remains largely untapped (Schiffer and Weder, 2011). Government assistance through low interest rate, public banks, guarantee schemes and other forms of subsidized financing play a key role in the development of SME.

The limited funds forces SMEs to operate solely and discreetly which translates to the shortage of working capital, inadequate marketing as well as being stagnant at the growth stage. Given that SMEs operate in small scale, one of their biggest challenge is to command competitive procurement, distribution as well as the selling price. The working capital of these SMEs is restricted in the illiquid inventory and receivables due to the unorganized sectors which makes SMEs prone to any demand disruption in the supply chain which can affect their operations drastically. The financial manager has to ensure cash available to the company in order to cover its operating expenses and short-term debts. To obtain an effective working capital management, the manager must manage the cash flow to pay the employees and debts, know when to take on short-term loan to pay the suppliers or unexpected expenses. The manager can keep more current assets to reduce liquidity risk. However, this would reduce the company’s profitability as current assets have low returns. In contrast, using more current liabilities which cost less will result in higher