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Initial Financing of Croatian SMEs: Financial Reports Evidence

Author

Listed:
  • Roberta Kontosic Pamic

    (Juraj Dobrila University of Pula, Croatia)

  • Adriana Galant

    (Juraj Dobrila University of Pula, Croatia)

Abstract

When starting a business, one of the major decisions that need to be made is how such business will be financed. Entrepreneur can consider different possibilities, the most commonly used sources of financing include own resources of entrepreneur(s) and combination of own resource and borrowed resources. Due to legal requirements, in Croatia it is theoretically impossible to start a company without own resources, although it is possible to start a company with symbolical amount of own resources. For a new company it could be hard to lend money from financial institutions due to the lack of business experience and asset, which could serve as collateral. Considering different available ways of financing new business, the aim of this paper is to analyse how new established Croatian SMEs are financed. The conducted research has shown that new entrepreneurs are using more borrowed resources to finance their asset compared to own resources.

Suggested Citation

  • Roberta Kontosic Pamic & Adriana Galant, 2020. "Initial Financing of Croatian SMEs: Financial Reports Evidence," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 18(4 (Winter), pages 265-283.
    • Handle: RePEc:mgt:youmgt:v:18:y:2020:i:4:p:265-283
    DOI: 10.26493/1854-6935.18.265-283
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    References listed on IDEAS

    as
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    3. Brown, Ross & Lee, Neil, 2019. "Strapped for cash? Funding for UK high growth SMEs since the global financial crisis," Journal of Business Research, Elsevier, vol. 99(C), pages 37-45.
    4. Bruce Dwyer & Keith Duncan & Colette Southam, 2020. "Small-scale private equity: demand versus supply," Accounting Research Journal, Emerald Group Publishing Limited, vol. 33(2), pages 363-380, February.
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    More about this item

    Keywords

    entrepreneurship; financing; financial reports; SMEs; Croatia;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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