Self-sustaining pattern of finance in small businesses: evidence from Turkey

• Published in: International journal of hospitality management Vol. 19; no. 3; pp. 261 - 273
• Main Authors: Özer, Bengi, Yamak, Sibel
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 2000
• Subjects: Capital structure; Developing countries; Financial source preferences; Small business management; Small hotels; Developing countries; Small business management; Small hotels; Financial source preferences; Capital structure
• ISSN: 0278-4319; 1873-4693
• DOI: 10.1016/S0278-4319(00)00025-6

The aim of this paper is to examine financial source preferences of small businesses. In doing so, it assumes an integrative perspective that combines financial theory with small business management literature. The study is conducted on 101 small hotels using structured questionnaires. It identifies sources of funds utilized at three different situations; including start-up, ongoing operations and future investments. Furthermore, it intends to relate financing patterns to strategic responses of owners to financial constraints. According to empirical findings, two patterns of financing emerge which are both self-sustaining in nature. Institutional debt is not perceived as a viable source, thus utilized to a negligible extent. Findings have significant policy implications for the improvement of financial environment relating to small businesses.