SMEs Financing: The Structure
Financing SMEs usually depends on its area of operation and its development phase. Therefore, SMEs have a financial development phase in which financial requirements and options transform as the business develops and grows to be more crystal clear. Since informal or internal sources of financing is unstructured and have limited rage, hence this study needs to focus on external or structured sources of financing SMEs. In the case of EU courtiers , for illustration , there is a strapping dependence on one specific source of external or formal finance, in the forms of bank loans, might potentially be more unfavorably influenced through recurring changes in the delivering of finance than one in the case of which there is a more expanded combination of sources of financing . The design of the utilizing of diverse sorts of external sources of SME finance in the EU is demonstrated in Figure 2. This becomes quite clear from Figure 2 that the main sources of SME finance in EU countries are bank loans and leasing.