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


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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.

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    • Figure 1. Structural model results
    • Figure 2. Financing framework for SME’s access to external finance
    • Table 1. Determinants of start-up business success
    • Table 2. Correlation between the constructs
    • Table 3. Scale accuracy
    • Table 4. Model fit summary
    • Table 5. Coefficient of determination (R2)
    • Table 6. VIF results in the structural model
    • Table 7. Hypothesis test results