Academy of Entrepreneurship Journal (Print ISSN: 1087-9595; Online ISSN: 1528-2686)


Sources of Finance and their Role On Small Business Success in Jordan

Author(s): Neda'a Ali Mohammed Jaber and Asaad Hameed Al-ali

The study aimed to identify the role of financing sources represented by (Investment capital, creditors, commercial credit, non-bank institutions, banking institutions, and government support) on small business success represented by (product success, project management success, project goal success and profitability) in Jordan. An online questionnaire was distributed for (240) of small business owner/manager through random sampling method. A set of statistical methods were used namely: arithmetic averages, correlation coefficients, multiple linear regression and Baron & Kenny's model to test the mediating variable represented by demographic characteristics of the small business and its owner. The study found that investment capital; creditors; banking institutions and government support, have a significant impact (α ≤ 0.05) on the success of small business, as they explain 47% of the change of small business success, whereas (commercial credit, and non-bank institutions) do not affect the success of small business. The study also found that the life of the project has a partial mediating role on the impact of the independent-dependent variables relationship, as well as no differences according to the viewpoint of the owners of small projects about the challenges and difficulties they face in obtaining appropriate financing, and that the most important of these difficulties: lack of low risk and easy financing sources to obtain liquidity, reluctance to obtain financing from banking institutions that are considered an insecure source due to the high interest rate, in addition to the lack of adequate government support. The study recommended the need to encourage various private and governmental funding sources to provide more diversified sets of alternatives to finance small businesses, and the need for non-bank and banking institutions to present more favorable terms by lowering interest rates, facilitating loan approval and extending repayment periods.

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