Strategies to Obtain Working Capital for Small Businesses

The inability to obtain working capital can affect small business continuity, especially in the long term. Small business owners must be able to access working capital or else risk business survival through liquidity shortages, lost customers, and falling profitability. Grounded in the pecking order theory, the purpose of this qualitative multiple-case study was to explore the strategies employed by small business owners to obtain working capital for business continuity beyond five years. The participants were eight small business owners in Maryland who had successful strategies to obtain working capital for business continuity beyond five years. Data were collected through semistructured one-on-one interviews and publicly available documents. Thematic analysis was conducted following Yin's five-phase process-compiling, disassembling, reassembling, interpreting, and concluding-to analyze the data. Five key themes emerged: (a) financing through retained earnings, (b) financing through nontraditional lending sources, (c) limited access to external funding in the early years, (d) reliance on external financing during later and critical business stages.