Analyzing the Financing Barriers to Small and Medium Enterprises

Currently, one of the most important challenges to SMEs is financing as their managers are faced with many problems in this area. In this study the barriers to SMEs financing were identified by using Q methodology which is a combination of qualitative and quantitative methods. After literature review and conduct of interviews with 12 executive managers of SMEs, 64 barriers were identified to the SMEs which were classified by 84 participants inter alia finance managers, supply managers and executive managers of enterprises. Finally, a different perspective (subjective patterns) of the participants about barriers to financing was recognized by using Q-factor analysis. Accordingly five subjective patterns were identified that explained 79.09 percent of total variations. In the first subjective pattern, views of respondents and lack of competition between enterprises; in the second subjective pattern; lack of necessary education in entrepreneurship and business; in the third subjective pattern, lack of necessary collateral for banking facilities; in the fourth subjective pattern, limitations in foreign investment, and in the fifth subjective pattern, inadequate governmental  support for small and medium enterprises, were identified as the main barriers to financing.