A decision model for the suitable financing for small and medium enterprises

This research proposes a “model of selection of the financing sources” which allows to identify both the financing entity to which the company may resort and the appropriate financing methods for the company (with particular reference to alternative instruments to the banking ones). Based on a sample of small and medium-sized Italian companies, and thanks to a quantitative method, the proposed model permits to select the financial sources, in order to choose the most appropriate financing methods for small and medium companies. It allows to suggest to the owners/or to the management appropriate debt-covering instruments different from the banking ones. The application of the model enables to change the financial culture within the company by expanding the knowledge and the use of alternative financing instruments to the bank and working on management unpreparedness and capital inadequacy of the companies. The originality of the research is coherent in the current context of the reference, which is changing in a profound way for both economic and normative reasons as well as presenting a different perspective in the light of the companies’ experience of the past years.