ACCA FM Syllabus E. Business Finance - Financing needs of small businesses - Notes 1 / 3
Financing needs of small businesses
SMEs need cash to fund their working capital.
They often have very little credit offered to them but have to offer credit to customers to be competitive
They also need to fund advertising as they are new to the market and fund initial capital expenditure of setting up the business
Not surprisingly most businesses fail within 2 years
Even after the 2 years - the problems aren’t over - as then they need to fund growth and getting more investment can then prove difficult…