Affiliation:
1. Universidade Europeia, Portugal
2. ISEG Lisbon School of Economics and Management, Portugal
3. IPAM, Portugal
Abstract
SMEs play a pivotal role in job creation and wealth generation, and their financial inclusion is crucial to assure their sustainability. This research explores if and how economic performance and financial stability influence lenders in their decisions. It measured economic performance and financial stability by profitability and liquidity ratios. It also explores the role of the audit report. It considers financial statements from 2016 to 2019, focusing on companies in the tourism sector in Portugal. The outcomes provide valuable insights for SMEs managers, helping them to access bank loans at a lower cost. This is crucial for the sustainability of these businesses, mainly considering the severe challenges faced by the tourism sector. These findings align with the United Nations Sustainable Development Goals, particularly Goal 8, which encompasses the objective of improving SMEs' access to financial services. This research demonstrates that both profitability and liquidity impact the cost of debt. The audit report and its content don't seem to influence credit conditions.
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