Leveraging Lending Institutions for Sustainable Growth: Implications for Sales Growth and Profitability in Small and Medium Enterprises

Abstract

This study is titled, Leveraging Lending Institutions for Sustainable Growth: Implications for Sales Growth and Profitability in Small and Medium Enterprises. This research studies how small and medium enterprises (SMEs) utilize lending institutions to achieve sustainable growth. A descriptive research design was used in this study with a total of 45 respondents who answered the survey questionnaires. The respondents of this study are individuals or representatives from small and medium enterprises (SMEs) who have experience the borrowing process from lending institutions. The research objectives dealt with a description of the demographic profile of the respondents, factors influencing financing decisions, the impact of leveraging lending institutions, challenges and opportunities in leveraging lending institutions for SMEs, and a strategic plan for enhancing SMEs' access to and utilization of financing from lending institutions. The research aims to understand how SMEs' utilization of lending institutions contributes to their long-term sustainability and financial success. The study revealed that the main factor influencing SMEs financing decisions is Access to capital. Likewise, there's a strong consensus among respondents that lending institutions have positively contributed to SME's growth and expansion. Additionally, high interest rates emerge as a notable challenge, with respondents strongly agreeing on its negative impact. Lastly, access to capital emerges as a crucial opportunity, enabling SMEs to obtain the financial resources necessary for their expansion initiatives, thus facilitating market penetration and operational improvements.