SMEs FINANCING – AN OVERVIEW OF DIRECT FINANCING ON CAPITAL MARKET VS. FINANCIAL INSTITUTIONS

The importance of the role played by SMEs in the global economy and their contribution to job creation, added value, innovation and growth is widely acknowledged, therefore it is extremely necessary to support their development. In order to be competitive, SMEs also rely on external financing, not only through financial institutions but also through direct participation in the capital market. Managers place great emphasis on financing their businesses, and most of the European companies relying primarily on bank loans as their most important source of founding, unlike in the United States of America, where the activity of stock exchanges is much more developed. This paper aims to study a shared analysis of the advantages and disadvantages of SMEs in Romania regarding financing through financial institutions vs direct participation in the capital market.