Working Papers in Responsible Banking & Finance

High growth firms are critical for economic growth yet little is known about their funding arrangements. Examining a survey of over 8,000 UK Small and Medium Sized Enterprises (SMEs), this paper investigates the financial issues confronting high growth SMEs compared to non-high growth SMEs. The findings show that rapidly growing SMEs are significantly more likely to apply for finance than non-high SMEs. High growth SMEs are more likely to use a ‘mixed cocktail’ of both internal and external funds than other firms. They are also less likely to seek external funding for working capital and are more likely to seek finance to fund strategic expansion such as acquisitions. Yet, in contrast to suggestions that high-growth SMEs may experience credit rationing, the results suggest they find it no harder than other firms to access external finance. The implications of the findings for future research and public policy are discussed. WP No 15-001