Hinhalagoda lekamalage pulsi kavindya sandeepani ariyarathna

Question 03 
How did you find the capital for your business?(See Figure 2.4) 
Through the third question, the author intends to find a crucial answer which has been 
mentioned by almost all the researchers over the world, who has done their research regarding 
the SMEs.One of the most important factors mentioned in the SME starting is the finding of 
the Capital for the start and for the basic day to day operations.In this sector, the responders 
were given 3 major choices, excluding any third party organzations that provide monetary 
funds.And the results are shown as follows in the figure 2.4. 
Figure 2.4 Response to Question 03(Author Construction) 
62.25%
18.50%
19.25%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Personal Savings
Family and Friends
Bank Loans

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38 
62.25% of the responds falls to the category in which it says they have used their 
personal savings to start their business and in the meantime, they were also given the chance to 
select, if they have used money from their family and friends and used the bank loans as well.In 
most cases, Entrepreneurs mention that Banks dont tend to give away any Loans either without 
a stable monthly income from any other way or if they dont have a good Business plan to 
present to the bank, when they are applying for a bank loan.The main factor which affects the 
bank’s decision here is the ability of the Customer to pay back the loan back to the Bank. If the 
Customer doesnt have a stable income or if he doesnt have a Clear and well designed business 
plan for the future, the chance of getting a bank loan is very slim.In those scenarios where the 
bank loans are refused, then they turn to their friends, family members and as a final stage, the 
money lenders, often called “loan sharks” who charge a high interest rate for the money lent.In 
these cases, Its always best to stay as much as in a clear and secure path to start their own 
businesses.