To identify and analysis the financing problem within small and medium Dissertation

To identify and analysis the financing problem within small and medium enterprise in the UK, and with the solutions of it - Dissertation Example Alternatively, Harper (1988, p.17) also observed that once small businesses have expanded and grown enormously into mega businesses over the time span of last twenty years and it has also eradicated the hindrance of traditional obstacles in way of the businesses and turning it into a significant contribution to employment power and economical development. The boom of SMEs have integrated the vital portions of businesses sectors and have not only flourish different businesses at national level but have also contributed to highly skilled labor and creative ideas regardless of its business operations or services it caters. To grow and nourish any business, there has to be sufficient funds available for its going concern status and its stability to adhere economical turndowns especially any inflated market. According to Hussain and Matlay (2007, 1-5), a significant number of small firms and businesses milk their financial needs by family and friends loans, personal savings and belongings despite of structure and size, number of employees or the nature of business activity. This has also regarded as a safe and easy source of finance to cater the first building block of any business. The another striking feature identified by Mason and Harrison (2000, pp. 221-239), was the reliance of stable and potential growth fostering SMEs to fund their operations and businesses through medium or long term finances by financial loans, convertible bonds from bank, microfinance intermediaries, venture capitalist or angle financing etc. Manigart and Sapienza (2000, pp. 240-258) also highlighted that when the cost associated with the going concern status of the firm increased to significant heights to mark the survival of the businesses that the funding of the financial resources become a hardcore factor and is solely dependent on external finances or retained earnings of the business’s profits. The SMEs market in UK has flourished over decades and has an immense contribution to wealth maximization, employment turnover, and businesses transforming into mega giants with development of different sectors of businesses as a cash cow or moneymaker to the economy. Storey (1994), depicted that innovation and creativity, re engineering of the infrastructure and business operations in the SMEs have outward the economic turndown with stable growth and employment opportunities in public and private sector of UK economy. Poutziouris (2003, pp.185-214) found out that SMEs foreign and national level operations and trade have matured the economic market and have urged the government to intervene in the public sector SMEs specifically and foster their policies and interest to cater the important role of economic development. The results can be devastating noted by Deakins et al., (2000) that the government policies and agenda could not fulfill the demands and development opportunities for the SMEs in long run. It could further result in an adverse impact on the economic and social sectors as well as the competitive advantage of the country enjoyed over the number of years. Chami (2001) noted that adverse behavior in market for insufficient sources of finance for the SMEs have an interrelationship within different factors for not only the availability of the capital but also it is affected by the traditional trade practices, international business ventures and the significant contribution of e- businesses