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Private Equity As Financing Source For Smes – An Outlook

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  • Laura Vasilescu

    (University of Craiova Faculty of Economics and Business Administration)

Abstract

Nowdays, one of the main barriers against the growth of Small and Medium Enterprises (SMEs) are related to difficulties in accessing finance. These obstacles have multiple causes, such as cyclical, structural but should be also considered the international economic background. SMEs are still dependent on bank loans for their external financing, therefore, suitable alternatives should be considered. Private Equity is an essential source for start-up, young and growth companies to create and add value, often through research and innovation. Anyway, equity should not be regarded as a substitute for traditional SME financing instruments. Rather, it serves a specific group of SMEs (including startups), which contribute in a great extent, to the innovativeness, productivity and development of the overall economy. In this paper, there are highlighted the importance of equity finance for SMEs in different stages of their development (creation, survival and growth), the main trends and evolutions in the European market of the private equity funds and some prospects regarding the private equity financing.

Suggested Citation

  • Laura Vasilescu, 2019. "Private Equity As Financing Source For Smes – An Outlook," Annals of University of Craiova - Economic Sciences Series, University of Craiova, Faculty of Economics and Business Administration, vol. 1(47), pages 87-95, November.
    • Handle: RePEc:aio:aucsse:v:1:y:2019:i:47:p:87-95
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    References listed on IDEAS

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    1. Beck, T.H.L., 2007. "Financing constraints of SMEs in developing countries : Evidence, determinants and solutions," Other publications TiSEM 85aac075-08b5-44ce-bf1a-9, Tilburg University, School of Economics and Management.
    2. Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
    3. Iota Kaousar Nassr & Gert Wehinger, 2016. "Opportunities and limitations of public equity markets for SMEs," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2015(1), pages 49-84.
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    More about this item

    Keywords

    financing; private equity; SMEs; prospects;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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