Abstract
Access to finance for small and medium-sized enterprises (SMEs) has moved up the global reform agenda and has become a topic of great interest for policy-makers, experts and researchers. Practitioners often deplore that SMEs face major difficulties in mobilizing external capital, above all loans from banks, due to lack of bankable collateral. Micro-enterprises appear to be better off because microfinance institutions have developed loan technologies that depend less on collateral, yet microfinance institutions frequently face refinancing constraints due to lack of collateral on their part. The main purpose of the study is to explore the liquidity and the financial performance of SMEs. To achieve this aim we use descriptive statistics, regression, and correlation analysis. The results demonstrate the dominant role of accounting expenditures and the importance of managing expenditures in order to achieve profitability. It is further discussed, how state authorities can design liquidity support schemes to provide bridge financing for solvent but illiquid firms. Obviously, public administrations are able to use guarantee schemes as a tool to improve SMEs access to financing while limiting the burden on the public budget.
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