Creative Financing Strategies for SMEs: Solutions to Face Economic and Financial Challenges

Abstract

Small and Medium Enterprises (SMEs) play a pivotal role in global economic growth, employment, and innovation. However, persistent financial constraints and economic fluctuations pose significant challenges, threatening their sustainability and growth potential. This study aims to identify and analyze creative financing strategies that SMEs can adopt to effectively navigate economic and financial challenges. Employing a qualitative method, the research utilizes a comprehensive literature review and case studies from selected SMEs across various industries. Data collection involves secondary data analysis complemented by expert interviews to validate findings and ensure comprehensive insight. The results indicate that SMEs adopting creative financing strategies—such as crowdfunding, peer-to-peer lending, supply chain financing, and fintech-based solutions—demonstrate enhanced financial resilience and sustainable growth compared to traditional financing methods. Additionally, the study highlights critical factors determining the success of these innovative financing mechanisms, including regulatory support, digital literacy, stakeholder engagement, and risk management capabilities. This research underscores practical implications by guiding policymakers, financial institutions, and SME practitioners toward optimizing financing models to overcome economic adversities. Strategically integrating creative financing can empower SMEs, bolster economic resilience, and foster a more inclusive and robust economic environment.