Strategies to obtain capital for small businesses in Maryland

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More than 500,000 small businesses constitute 97% of businesses in Maryland and employ more than one million people (SBA, 2018b). In 2014, 4,074 new small businesses started in Maryland, and in the same year, 3,730 closed, marking a large percentage of failed small businesses compared to those opened. External funding is necessary for the sustainability and growth of small businesses (Neagu, 2016). Access to financial resources is essential for business leaders to pay for operating expenses, debts, inventory, and business growth. Many business leaders attribute business failures to external factors, although internal management capabilities and approaches significantly impact business sustainability (Eggers & Lin, 2015). Poor management skills and an inability to access finances are the main reasons for business failure (Lee, 2016). Accordingly, I will explore effective Maryland small business owners’ effective strategies to obtain a working capital line of credit for business continuity for 5 years or longer.

Insufficient access to funds, including lines of credit, causes 29% of small businesses to fail within the first 5 years of operation (Shabat, 2019). Small business owners encounter challenges obtaining a working capital line of credit (U.S. Federal Reserve Bank, 2017). The general business problem is that some small business owners cannot access working capital lines of credit, which threatens business survival through liquidity shortages, lost customers, and falling profitability. The specific business problem is that some small business owners lack strategies to obtain a working capital line of credit for business continuity.

The three research methods are qualitative, quantitative, and mixed methods (Yin, 2017). In a qualitative study, a researcher explores a phenomenon (Glaser & Strauss, 2017); in comparison, a quantitative researcher statistically measures the relationship between variables (Goertzen, 2017). A researcher employs both qualitative and quantitative approaches in mixed methods (Yin, 2017). Because I will not use numerical data to understand the research phenomenon in this study, neither the quantitative nor mixed methods approach is appropriate; therefore, I will use the qualitative methodology with a case study design.

1. What strategies did you use to obtain a working capital line of credit?

2. What are the significant challenges you encountered in securing a working capital line of credit?

3. How did you overcome the challenges you encountered in securing a working capital line of credit?

4. What strategies did you use to develop a successful banking relationship to secure working capital?

5. How, if at all, did you have to modify the initial strategies you used for obtaining a working capital line of credit?

6. What else could you share that is pertinent to the procedures for obtaining credit for your business?

This study’s conceptual framework is the theory of discouraged borrowers (TDB), created in 2003 by Kon and Storey. According to TDB, some small business owners find themselves discouraged from applying for bank financing for three primary reasons: asymmetric information, application costs, and market rates (Kon & Storey, 2003). The idea of credit rationing from banks is one component of business owners’ discouragement, which may prevent them from applying for bank loans. The TDB is applicable to the proposed study because it provides a framework appropriate to explore small business owners seeking to obtain a working capital line of credit for business continuity.

The business environment is becoming faster paced because of economic shifts, globalization, and technological breakthroughs (Guillén et al., 2014). This rapidly changing environment means business leaders must adjust their behavior in adapting to new information and approaches to acquiring credit (Lichtenstein & Plowman, 2009). The TDB provides a conceptual framework to understand why some small business owners face difficulties applying for and obtaining a working capital line of credit for business continuity beyond 5 years.

Cash flow: Net income plus depreciation, amortization, and depletion (Deakin, 1972).

Small business: An entity with fewer than 500 employees (SBA, 2018a).

Working capital: The operating liquidity of a business, which is the difference between current assets and current liability (Nguyen et al., 2016).

Assumptions are beliefs that a researcher cannot verify but presumes to be true (Marshall & Rossman, 2016). In this study, the first assumption is that a qualitative approach with a multiple case study design will be appropriate for answering the research question. Another assumption is that the participants will provide honest responses to the interview questions. If participants withhold information or misrepresent their experiences, my findings will not be accurate. I also assume that interviews with five small business owners and reviews of their company documents will be sufficient to achieve data saturation, without which I could not have confidence in my results.

Limitations stem from methodology and design issues beyond the researcher’s control (Yin, 2017). One limitation of this study is the use of qualitative methodology because qualitative findings are subjective and dependent upon the researcher’s interpretation (Dennis, 2018). Accordingly, the risk of researcher bias is another limitation. Because of the small sample size and specific qualification criteria, the transferability of qualitative findings may be limited and, therefore, subject to the reader’s opinions regarding applicability to other populations or situations. Qualitative data analysis is another limitation because reliability and validity are dependent on the researcher’s determination of all relevant themes and achieving data saturation.

Delimitations are the boundaries set by a researcher as criteria for participation (Theofanidis & Fountouki, 2019). I limited the scope of the proposed study to exploring the phenomenon of strategies small business owners have used to secure a working capital line of credit for business continuity. Delimitations for participation include owners of manufacturing and wholesale small businesses in Maryland that employ 500 or fewer employees and have been in operation longer than 5 years. Outside the scope of the study are owners of newly created nonregistered businesses not in operation 5 years or longer, not located in Maryland, or employing more than 500 people. There were no delimitations concerning participants’ gender, age, race, or immigration status.

Some small businesses fail because of insufficient access to working capital (Liu, 2015). Securing a line of credit could ensure business continuity and growth, resulting in continued advancement opportunities for employees and a more thriving community. The findings of this study may be of value to businesses. First, small business owners can learn of the strategies used by other small business owners to successfully obtain a working capital line of credit, thus ensuring business continuity beyond 5 years. Contributions to positive social change may come from more small business owners maintaining their businesses’ operation, continuing to employ their workers, and economically benefiting the community.

The results of this study can contribute to business practice in at least two ways. First, small business owners may learn about and implement credit acquisition strategies that lead to increased business performance in the long term. Individuals considering opening small businesses could also find these results helpful when creating their business plans and forecasts. The research findings may be valuable to small business owners, banking officials, government agencies, and creditors in understanding the strategies small business leaders use to access credit.

Small business owners play an important role in facilitating the health of the local economy (Brown, 2018). The community can benefit from the results of this study in many ways. Considering that sustainability is a pathway to a significant competitive advantage, small business owners may be willing to participate in new programs in the community and invest more in their workforce’s well-being. The increase of small businesses operating in the community leads to job creation, poverty reduction, and the potential for a higher standard of living among citizens (Shibia & Barako, 2017). Employees’ families also benefit when individuals prosper in a healthy working environment with increased opportunities for employment.

Conducting the literature review on the research topic involved accessing various journals and seminal books through the Walden University Library website. Databases searched included ABI/INFORM Complete, ProQuest Central, Emerald Management, Business Source Complete, Academic Research Complete, and SAGE Premier. I also conducted searches through Google Scholar and AOSIS Open Journals. Google Scholar queries provided various interdisciplinary results, including conference proceedings, and AOSIS Open Journals searches returned peer-reviewed scholarly articles from a wide range of academic disciplines. A review of business journals and publications returned research specific to small businesses and small business owners. Government websites, including those of the SBA and the Maryland Chamber of Commerce, provided valuable information on small businesses’ credit strategies and programs.

In searching for relevant literature, I gave preference to peer-reviewed articles published between 2018 and 2021 to obtain current information and findings. Ulrich’s Periodicals Directory was a helpful tool to ensure the selection of peer-reviewed articles. Keywords and combinations of keywords used for the search included small business, business lending, small business lending, small business financing, credit strategies, bank loans, sources of financing, working capital line of credit, small business and financial constraints, small business continuity, capital structure, information asymmetry, and the lending process, small businesses and audited financial statements, small business leadership, the theory of discouraged borrowers, and small business and discouraged borrower. The literature review search produced 142 resources, 137 (85%) of which were peer-reviewed articles published between 2018 and 2021.

I compared the work of different scholars to obtain varied perspectives on the research phenomenon. The first overarching concept, the likelihood of application for and approval of a working capital line of credit, emerged from discussions of the TDB in the context of small businesses. The discussion topics related to the second concept, small businesses, included small business sustainability, small business challenges, and government roles. The concept of small business financing emerged from literature on funding programs, sources of capital, and credit strategies, with a fourth concept of information symmetry in the lending process.

The purpose of this qualitative multiple case study is to explore strategies that small business owners use to obtain a working capital line of credit for business continuity. The literature review begins with an in-depth exploration of the conceptual framework of the TDB and how researchers have used it in related studies. Other relevant topics discussed are small business financing, credit strategies, information symmetry in the lending process, and audited financial statements.

Despite requiring external financing, many business owners do not apply for credit due to a fear of rejection (Wernli & Dietrich, 2021). Because not all small business owners pursue financing, studies on credit availability are challenging. Levenson and Willard (2000) addressed this fear in laying a foundation for TDB. Subsequently, Kon and Storey (2003) further labeled and explored the TDB.

TDB has become a popular topic of study in recent years (e.g., Bertrand et al., 2021; Bhusal & Wang, 2019; Giang, 2021; Jude & Adamou, 2018; Mol-Gómez-Vázquez et al., 2018, 2019, 2021; Naegels et al., 2021; Qi & Nguyen, 2020; Rostamkalaei et al., 2018; Statnik & Giang, 2019; Wernli & Dietrich, 2021). Wernli and Dietrich (2021) surveyed Swiss SME leaders to examine their ability to access bank loans, finding greater discouragement from credit constraints than turndowns. Among the reasons business leaders gave for being discouraged were high collateral requirements, expectations of rejection, and cumbersome application processes.

Based on the increasing activity of foreign banks in European countries, Mol-Gómez-Vázquez et al. (2019) examined the impacts of foreign banks on borrower discouragement. The study involved analyzing data from SMEs operating in 25 developed and developing countries in Europe. The results showed that financing constraints increased with greater numbers of foreign banks. However, in high-income countries, borrower discouragement tended to decrease or increase less with the presence of foreign banks.

Qi and Nguyen (2020) examined the impacts of government connections on credit access among 30 SMEs in developing countries. Data analysis showed that SMEs with strong government connections were less often discouraged from seeking credit. This finding was interesting, as SMEs with government connections do not receive preferential treatment from banks.

Rostamkalaei et al. (2018) explored the causes of borrower discouragement, specifically the role of informal rejection in discouraging borrowers. The researchers found that informal turndowns discouraged SMEs from seeking credit. Additionally, SME leaders’ judgment often discouraged them from seeking credit. Another finding was that leaders of established firms relied more on informal talks with lending institutions instead of letting personal judgments discourage them.

Banking systems play a role in SME financing. Mol-Gómez-Vázquez et al. (2021) examined the influences of the European banking system stability on discouraged borrowers. The multilevel study took place between 2011 and 2018 and involved 16,342 firms. The findings showed that SME leaders in countries with more stable banking systems were less likely to be discouraged than those with less stable banking systems. Mol-Gómez-Vázquez et al. (2018) also explored the effect of bank market power on borrower discouragement with 2,582 firms in 25 developed European countries. Data analysis showed a reduced intensity of borrower discouragement with the level of bank market power.

Additional influences over bank lending come from gender and gendered language. Using World Bank Enterprise Survey data from 32,955 firms across 56 countries, Bertrand et al. (2021) examined the impact of gendered language on borrower discouragement. Guiding their research was the view that female entrepreneurs have less access to credit than their male counterparts. Based on the findings, Bertrand et al. concluded that gendered language discouraged female entrepreneurs from applying for credit. Naegels et al. (2021) examined the process of discouraged female borrowers through interviews with female entrepreneurs in Tanzania. The findings showed that women held negative views of loan applications, payback procedures, and funding allocation. Further, negative views of loans led to unfavorable attitudes toward them, discouraging individuals from applying.

Information-sharing also affects borrowers’ confidence or resistance in applying for small business financing. Giang (2021) explored the effectiveness of information-sharing in addressing the issue of discouraged borrowers. Data for the study were from two World Bank sources, the Enterprise Survey and the Doing Business publication. Data analysis showed that information-sharing through private credit bureaus discouraged individuals from applying for credit when its coverage was low. However, bank loan demand grew with sufficient levels of information-sharing.

Although Statnik and Giang (2019) also explored the issue of discouraged borrowers, they focused on the role of corruption in discouraging applicants. From an analysis of World Bank Enterprise Survey data, the researchers found that a country’s level of corruption affected individuals’ ability to apply for loans. According to Statnik and Giang, the number of discouraged borrowers increased as corruption grew.

Business leaders’ beliefs and actions affect their likelihood of loan application. Jude and Adamou (2018) suggested that small business owners’ behaviors had the greatest influence on their decision to apply for bank loans and working capital lines of credit. The researchers found that in addition to control aversion and overconfidence, discouragement heavily influenced whether a business owner would apply for bank financing. Bhusal and Wang (2019) attributed borrower discouragement to three determinants: the perceived cost of financing, the small business owner’s history with financing, and the would-be applicant’s fear of prejudice.

The TDB (Kon & Storey, 2003) was the most applicable theory for the proposed study, with other concepts only peripherally related. The alternative theories I considered were the credit theory of money and the theory of financial management.

Credit Theory of Money

The earliest published credit theory was Innes’s (1914) credit theory of money. Innes’s assertion was that money was the only capital that mattered, which directly applies to small businesses needing a working capital line of credit. Innes identified a subtheory to explain a business owner’s satisfaction with the lending process and subsequent ability to repay the loan; however, the author did not address factors affecting business owners’ success in achieving loans. Because Innes’s credit theory of money pertained only to the lending and repayment of business loans and not the strategies used to obtain the loan, it was not appropriate for this study.

Theory of Financial Management

Ang (1991, 1992) proposed a theory peripherally related to the focus of this study. Applied to small businesses, the theory of financial management centered on business failures due to a lack of financing options (Ang, 1991). Ang (1991) wavered in theoretical focus, first introducing the loosely termed theory of modern corporate finance, which applied to businesses of any size. Ultimately, Ang (1991, 1992) conceded that identifying a single theory specific to small businesses’ capital structure was not possible. Ang (1992) explored the difficulty faced by small business owners in securing funding for continued operation. After asserting that no single finance theory fully addressed small businesses’ unique needs, the scholar differentiated between large and small businesses, finding the latter’s success aligned closely with the business owner’s reputation and relationships with lenders. The theory of financial management is related to restricted financing options and organizational failure for businesses of any size. Because the theory does not apply specifically to small business owners and the strategies used to obtain financing for continued operation, it was also wrong for this study.

Thematic analysis is a widely used qualitative data analysis method in many fields, including health care, psychology, and sports (Khokhar et al., 2020; Xu & Zammit, 2020). With thematic analysis, researchers look for repeated meaning across a given data set (Xu & Zammit, 2020), identifying and organizing relevant themes and subthemes, and then using the themes for analysis (Labra et al., 2020). Thematic analysis occurs systematically (Khokhar et al., 2020; Labra et al., 2020) through six phases: familiarization with collected data, generating initial codes, searching for themes, reviewing themes, defining and naming themes, and presenting and discussion results (Labra et al., 2020). Although distinct, the phases overlap and interact and thus do not occur sequentially.

Small businesses—defined as companies with fewer than 500 employees (SBA, 2018b)—play an essential role in economic growth (Ahmad et al., 2020; Malesios et al., 2021). In 2013, 28 million small businesses accounted for over 99.9% of all businesses in the United States (SBA, 2018b). Small businesses have a positive effect on the gross domestic product (Malesios et al., 2021; Woźniak et al., 2019). Additionally, small businesses help address the issue of unemployment in the economy, thus playing a social role.

In the United States, small business leaders struggle to sustain their business longer than 5 years (SBA, 2018a). In 2013, 406,353 start-up businesses appeared, and 400,687 others dissolved, showing a narrow gap between the openings and closings of prior years. One factor that plays a critical role in small business failure is finance. Access to capital enables small businesses to achieve their potential (Organization for Economic Co-operation and Development [OECD], 2020). Like other organizations, small businesses require access to both working and investment capital. As their names suggest, working capital is required for the daily operation of small businesses, whereas investment capital is necessary for investment. However, small businesses are at a disadvantage in accessing finance due to limited credit history, insufficient collateral, and a lack of business planning expertise. According to Mazzarol and Reboud (2019), inadequate working capital contributes to the failure of small business start-ups, which require funds during the initial years of operation for paying creditors, taxes, wages, and overhead costs.

Small Business Sustainability

Sustainability concerns the environment, work requirements, human rights, business ethics, anticorruption, diversity, and gender equality (Tsvetkova et al., 2020). The issue of sustainability has been gaining traction since the 1970s (Burlea-Schiopoiu & Mihai, 2019) in recognition of the impacts that businesses have on the environment and society (Sarango-Lalangui et al., 2018; Tsvetkova et al., 2020). Since its introduction, the concept of sustainability has evolved to include attributes such as bio/green innovation and environmental issues (Burlea-Schiopoiu & Mihai, 2019). Sustainability has become a goal ingrained in businesses’ strategic missions and visions as a corporate social responsibility.

Sustainability is also important for small businesses. According to Sarango-Lalangui et al. (2018), small businesses, like their medium-sized and larger counterparts, can significantly impact their immediate environments. Small business sustainability allows them to compete favorably and succeed in an otherwise challenging business environment (Tsvetkova et al., 2020). Additionally, sustainability enables small businesses to benefit from improved financing and access to labor and ideas (Long, 2020). At the same time, small business sustainability benefits local communities, resulting in improved infrastructure, better health, and increased access to employment. For small businesses, sustainability involves balancing the company’s interests (financial, material, and human resources) and the operating environment (social and economic environment; Burlea-Schiopoiu & Mihai, 2019).

Small businesses lag behind medium and large businesses in implementing sustainability, despite its importance. A lack of financial resources and limited time are among the factors preventing small businesses from developing and implementing sustainability strategies (Burlea-Schiopoiu & Mihai, 2019). Additionally, there is a perception among small business owners that sustainability is a risky undertaking without significant financial returns. This study will be an exploration of how small business owners acquire working capital lines of credit for business continuity. Small business owners must have strategies in place for their organizations to remain sustainable.

Access to financing is a significant problem for small businesses (Mazzarol & Reboud, 2019). Small businesses receive funding from different sources, one of which is bootstrap financing. According to Mazzarol and Reboud (2019), bootstrap financing is owner-provided funds, including savings, retained profits, and cash flow management. Another source, equity financing, involves obtaining money from other investors by offering them a portion of ownership of the business. Last, small businesses obtain funding through debt financing, borrowing from lenders to invest in the business.

Many commercial incentive loans are available to small businesses in Maryland. These 500,000 small businesses constitute 97% of the total businesses in the state and employ more than one million people (SBA, 2018b). In 2014, lending institutions issued over $1 billion in loans to small businesses. According to the SBA (2018b), 4,074 new small businesses started in 2014, and 3,730 businesses closed. The Maryland Small Business Development Financing Authority helps small businesses that do not meet the established loan criteria of financial institutions through a range of funding programs (Maryland Department of Commerce, n.d.)

The Maryland Small Business COVID-19 RELIEF Grant Program helped during the 2020–2021 fiscal year, when Maryland’s small businesses facing continued financial impacts from the pandemic. Through bipartisan legislation, the state established the program in 2021 with $10 million in state funding. (https://commerce.maryland.gov/fund/small-business-convid-relief-grant-program). The grant offers funding to enable qualifying Maryland small businesses owners to obtain working capital and offset all disrupted operations due to COVID-19 (https://commerce.maryland.gov/fund/small-business-convid-relief-grant-program.

Small Business Credit

Access to credit or other sources of financing is necessary for the success, growth, and sustainability of small businesses (Włodarczyk et al., 2018). A Fed Small Business (2021) survey found that 37% of small businesses did not apply for Personal Protection Program (PPP) loans because they considered themselves unqualified for the loans and loan forgiveness, and 23% did not apply because the program was complex and confusing. Other reasons small businesses did not submit PPP applications were that they could not find a lender, pursued alternative sources, or did not need the loan.

Loan approval rates vary from one lender to another. According to Statista (2019), institutions’ loan approval rates for small businesses were 65.9%, with small bank, credit union, and big bank approval rates of 50.3%, 39.7%, and 27.9%, respectively. These differences indicate that small businesses’ success in acquiring credit differs by loan facility.

Small Businesses and Government Roles

The government also plays an essential role in lending to small and medium-sized enterprises. According to Mazzarol and Reboud (2019), governments worldwide can influence the operation of small businesses through policy framework development. Mazzarol and Reboud highlighted six areas for government focus when developing policy frameworks to help small businesses: providing business development services, creating business-enabling environments, facilitating market access, promoting innovation and technology use, creating an entrepreneurial culture, and providing access to financing. Government agencies, such as the SBA, provide loan guarantees to small businesses and encourage local banks to work with start-up or established companies wanting to expand.

Governments can help small businesses through debt and equity financing, credit access, conducive banking regulations, and microfinancing (Mazzarol & Reboud, 2019). Governments can further enable small businesses’ access to finance by developing loan guarantee programs (Greene, 2020). Most lenders are reluctant to extend credit facilities to small businesses due to the fear of default. Early-stage ventures and small businesses are the most frequent recipients of loan denials. The U.S. government could improve loan access by acting as a guarantor. Government can also promote access to credit by small businesses by offering grants or microloans. The SBA has a microloan program that provides small business loans of up to $50,000 (SBA, 2018b). Compared to loans from other lending institutions, microloan program loans have considerably lower interest, but there are restrictions. The microloan program funds can provide working capital to buy furniture and fixtures, purchase supplies, meet inventory costs, and acquire equipment and machinery. However, they are not for settling existing loans, paying debts, or purchasing real estate.

Strategies in Acquiring a Line of Credit

The strategies small businesses use in acquiring a working capital line of credit is a common topic of recent scholarly inquiry (Ahmed, 2019; Durst & Gerstlberger, 2020; Smith, 2018; Wani, 2018). In their study, Durst and Gerstlberger (2020) explored support programs used by governments worldwide to facilitate small business enterprises’ access to capital. The researchers found significant regional differences in approaches to financing small businesses enterprises. For instance, the U.S. government has extensively used loans, equity financing, and surety bonds to promote small businesses’ access to financing. In comparison, domestic banks are the leading financing providers in Canada. Durst and Gerstlberger concluded that government policies play a critical role in small business enterprises’ acquisition of a line of credit.

Ahmed (2019) conducted a qualitative multiple case study on the strategies small business owners in Jordan used to acquire credit, collecting data via one-on-one interviews. The researcher identified several techniques business owners used to acquire external loans. First, owners focused on developing financial trust to qualify for a loan rather than seeking loans during the businesses’ early stages. Another strategy mentioned by all participants was improving their financial literacy skills. The participants also used social networking and information-sharing to understand loans’ application procedures, terms, and conditions.

In another study, Smith (2018) explored small business owners’ strategies to secure financing for ongoing operations. Smith engaged pecking order theory to explore the strategies used by small business owners in the Southeast United States in securing working capital lines of credit for continued operations. From a review of company documents and semistructured interviews with six business owners, Smith found participants were more likely to have used personal funds, customer revenue streams, bootstrapping, and personal credit.

Identifying the strategies used to secure financing could be less important than defining the characteristics of business leaders who succeed in obtaining working capital lines of credit. Themes from a multiple case study by Wani (2018) were more specific to the owners’ traits than their strategic actions. Wani noted the importance of strong entrepreneurial management and financial planning skills in achieving business continuity, identifying the absence of either skill as a challenge to continuity. Other strengths that require business owners to secure funds for continued operations include developing a capital strategy, preparing and adapting to change, and assuming responsibility for creating and maintaining accurate and transparent financial records (Ahmed, 2019; Wani, 2018).

The purposes of commerce incentive funds are to help business leaders create jobs, support the local economy, help disadvantaged small businesses, and promote start-up businesses (Maryland Department of Commerce, n.d.). Maryland’s incentive-based loans exceeded $90 million in 2016. Other means of financial assistance to small businesses in the state are tax credits and grants. Small businesses in Maryland have a range of options to secure financing for business continuity; however, not all business owners are aware of these options. Through an in-depth exploration of financing sources from governments, banks, and lending programs, this literature review showed that funding may be more accessible than previously believed. This qualitative exploration of small business leaders’ experiences in obtaining working lines of credit may indicate the use of such programs.

Access to external financing is critical to SMEs (Aboojafari et al., 2019) because credit helps facilitate their growth (Maini, 2019). According to Aboojafari et al. (2019), SME leaders require external financing when personal resources are inadequate for meeting their needs. However, access to credit can be challenging for small businesses. Several strategies SME owners can use to acquire credit include credit guarantee schemes, credit ratings, lending relationships, peer-to-peer lending, and tapping into technology.

Credit Guarantee Schemes

The first credit strategy is the use of credit guarantee schemes. According to the World Bank (n.d.), credit guarantee schemes provide third-party credit risk mitigation to lenders by protecting them against losses that may occur due to default. In recognition of SMEs’ important role in the economy, most governments worldwide have developed credit guarantee schemes for these smaller entities. Several scholars have explored how credit guarantee schemes facilitate access to credit.

Maini (2019) looked at the role credit guarantee schemes play in financing SMEs in India, finding they had incentivized banks to extend credit to SMEs. In another study, Wardhono et al. (2019) examined how credit guarantee schemes facilitate credit access by SMEs. The researchers found SMEs with a credit guarantee better placed to access credit services than those without. The role of credit guarantee schemes was also a topic explored by Corredera-Catalán et al. (2020), although they focused on the Spanish guaranteed model. Data analysis showed that governments could use grantee schemes as tools or instruments for improving access to financing by SMEs. Dang and Chuc (2019) examined the challenges of implementing credit guarantee schemes and the reasons behind their poor performance. Based on the findings, Dang and Chuc concluded that credit guarantee schemes failed to achieve their goals due to strict and impractical conditions, the absence of a credit database, and a lack of adequate professional competence.

Credit Ratings

Credit ratings play a critical role in determining SMEs’ ability to access financing (Pertaia et al., 2018). According to Pertaia et al. (2018) and Ubarhande and Chandani (2021), banks and other lenders rely on credit ratings to determine a debtor’s creditworthiness. Creditworthiness is the focal point of credit processing worldwide (Ubarhande & Chandani, 2020). Despite common views of credit ratings as obstacles to accessing credit (Pertaia et al., 2018), ratings can also provide opportunities to access credit. According to Ahmed (2019), some small business owners demonstrate creditworthiness by saving and establishing a good credit history; in contrast, other business owners avoid or minimize their use of financing to maintain high credit scores. Finally, scholars have focused on how to restructure credit ratings to improve SMEs’ credit accessibility. For example, Yoshino and Taghizadeh-Hesary (2019) developed a method for assigning credit ratings that lowered the collateral and interest rate requirements.

Lending Relationships

The relationship between SMEs and lending institutions plays a critical role in determining access to capital. In a study of Italian manufacturing firms, Murro and Peruzzi (2021) found that business owners who maintained close and long-lasting relationships with lending institutions could access more credit than owners without. However, business owners’ ability to access credit depended on the information they provided to lenders. In another study, Ghosh (2019) demonstrated that the relationship between lenders and borrowers played a crucial role in determining credit accessibility. Accordingly, borrowers who maintained long-term relationships with lenders had a greater chance of obtaining credit than those with limited or no relationships. Finding similar results, Angori et al. (2019) asserted that the depth and strength of relationships between lender and borrower affect credit demand differently. Additionally, Angori et al. (2019) found that multiple banking relationships help alleviate the financial constraints that SMEs face. In another study, Angori et al. (2020) analyzed the impact of relationships on European firms’ ability to access credit. Their study showed that relationship approaches to lending improve access to credit and other sources of external financing. Ding et al. (2019) found that the reputation a borrower builds over time affects lending decisions. This finding implies that the longer borrowers can maintain good relationships and reputations, they are more likely to access loans business owners with poor reputations.

Small Business Lending During COVID-19 Comment by Natalie Casale: Where are your citations? All factual and statistical information must be cited.

The growth in pandemic-time lending was due to small businesses’ participation in the PPP and banks’ use of the PPP Liquidity Facility (Board of Governors of the Federal Reserve System, 2021). Data from the first half of 2020 suggested that these programs were successfully supported lending growth during the crisis, particularly among small banks (SBA, 2020). The programs encouraged increased lending to small businesses and farms during the COVID-19 crisis. To the extent that small businesses’ credit needs were dependent on their relationships with smaller banks, these programs have helped reduce the financial strain on small businesses. However, small banks played a much larger role in small business lending in the first half of 2020. Small banks accounted for 25.4% of the lending during this period, with medium and larger banks at 22.4% and 52.2%, respectively. These numbers highlight the important role of small banks, which provided a quarter of the total lending to these borrowers. (Beaurard, R., A. Lopez, and Mark .M Spiegel (2020). Comment by Natalie Casale: Passive voice; please change to active voice

Tapping Into Technology

Although the impacts of technology remain ambiguous, some scholars have suggested using technology to improve access to credit, as shown by the growth in digital lending. Researchers have explored the role of digital lending in improving access to credit. For instance, Johnen et al. (2021) examined digital lending’s role in bridging the gap in credit access. Using data from Kenya, the researchers found that digital lending increased borrowing opportunities; however, it also reduced individuals’ creditworthiness.

Adopting cutting-edge technologies, even if involuntarily, to steer business activities during community lockdowns was necessary to contain the spread of the COVID-19 pandemic Ikpe, J. A, Didier., S, &Dong-Heon(Austin) Kwak(2021). Technologies offer competitive advantages and provide a means for survival (Akpan et al., 2021). Most pandemic-time transactions took place online, including applying for loans from state and federal government-provided resources. Globally, businesses of all sizes had expected a gradual awareness and adoption of cutting-edge technologies to drive business activities, like borrowing from banks, to curtail the human-to-human transmission of COVID-19. Even amid lockdowns, business activities could continue online with owners’ adopting technology. Comment by Natalie Casale: You need evidence to support your analysis.

Peer-to-Peer

Peer-to-peer lending is emerging as another strategy SMEs use to access credit, even those turned down by traditional lenders. After examining the development of peer-to-peer lending in China, Cosgrove and Chowdhury (2021) attributed the growth of peer-to-peer lending to various factors, including different ways of determining creditworthiness. Naysary and Daud (2021) also explored peer-to-peer lending and its implication on the economy, collecting data from financial technology firms and government sources between 2014 and 2019. The researchers found that peer-to-peer lending was critical to the economy. Additionally, the study showed that peer-to-peer lending improved SME leaders’ ability to access credit. In another study, Basha et al. (2021) found that most borrowers considered peer-to-peer lending an alternative credit source. However, scholars often recommend the implementation of strict regulations in the peer-to-peer lending industry (Basha et al., 2021; Naysary & Daud, 2021).

The peer-to-peer lending industry showed the most significant use of technology and innovation during the pandemic. Technology used during COVID-19 has enabled and fostered community and civic spirit. In the United Kingdom and the United States, small- and medium-sized firms, universities, and individuals used 3D printers to create personal prospective equipment, alleviating the shortages during the early stages of the pandemic (Kennesaw State University, 2020). There were some technologies tested during the lockdown to identify potential new markets and create ways for small businesses to access resources without face-to-face contact. Comment by Natalie Casale: Passive voice; please change to active voice.

Information symmetry occurs when there is inequality in information asymmetry (Mhlanga, 2021). According to Mhlanga (2021), information asymmetry causes power imbalances between parties, making transactions inefficient. In lending transactions, information asymmetry makes it difficult for lenders to differentiate between high-risk and low-risk borrowers. As a result, lenders tend to deny credit even to low-risk borrowers.

Audited financial statements show the performance of a firm (Otuya et al., 2019). The accounting information provided by would-be borrowers affects lending decisions (Aifuwa et al., 2019). In their study, Aifuwa et al. (2019) found that Nigerian manufacturing firms’ accounting information determined their ability to access loans. Accordingly, showing the monetary value of collateral had positive impacts on banks’ lending decisions. Exploring the role of financial statements, Otuya et al. (2019) found that financial information played a critical role in determining firms’ performance, including the ability to access credit. SMEs face challenges in maintaining financial records (Aladejebi & Oladimeji, 2019); thus, leaders often struggle to access credit (Aifuwa et al., 2019).

In the second quarter of 2020, a new economic threat presented in the form of a global pandemic. Although the long-term impact of the COVID-19 epidemic is unknown, early responses are alternately encouraging and disheartening (DePietro, 2020; Dunkelberg, 2020). Positive impacts have included low-interest or interest-free lines of credit, higher lines of credit, waived late fees, and deferred payments. The onset of COVID-19 increased the need for small business credit, as indicated by the demand for government-provided financial assistance. The U.S. government introduced financial assistance in the form of small business loans to pay employees’ salaries while businesses were inoperational, with many of the loans forgivable; however, the $370 billion Paycheck Protection Program ran out of funds after just 14 days (Ransom, 2020, para. 2), with only 20% of applications processed (Dunkelberg, 2020, para. 4). Congress approved the second round of small business loans of $310 billion, 40% of which was still available 2 weeks after launch (Green, 2020; Hayashi, 2020). The pandemic’s impact on small businesses in 2020 and beyond is unknown (Kukura, 2020).

Amid COVID-19’s far-reaching impacts, businesses adjusted their activities to utilize open tools and implement innovative promotion processes. Small businesses primarily derive revenues from subcontracting, business-to-business work, and long-term agreements. As a result, small businesses often fare better during periods of economic difficulty and uncertainty (Harel, 2020). Comment by Natalie Casale: Use the Grammarly tool for issues. Your score is 84%.

The COVID-19 pandemic’s impact on the revenue of industrial-sector small businesses was dependent on many factors. The extent to which small businesses made changes in operations and activities, utilized open innovation tools, and implemented various managerial processes helped sustain operations during the pandemic. Small businesses that implemented business activity changes or adjustments during the pandemic had reduced expenses compared to businesses that did not change or adjust.

Over half of all U.S. companies meet the definition of small businesses, employing fewer than 500 employees (SBA, 2018a); however, nearly half of those small businesses fail to operate beyond 5 years (Small Business & Entrepreneurship Council, 2016). The specific business problem is that some small business owners lack strategies to obtain a working capital line of credit for business continuity. The purpose of this qualitative multiple case study is to explore strategies that small business owners use to obtain a working capital line of credit for business continuity. Kon and Storey’s (2003) TDB serves as the guiding conceptual framework to explore the perceptions of small business owners seeking to apply for working capital lines of credit to ensure business continuity. The literature review in Section 1 pertained to the research topic of small businesses, including opportunities and challenges, types of credit available to small business leaders, information symmetry in the lending process, and credit strategies.

Section 2 includes a detailed analysis of the research method and design as well as support for why the selected method and design are suitable for the study. I also discuss participant selection, the role of the researcher, ethical considerations, and the data collection, organization, and analysis procedures. Concluding Section 2 is a discussion of the research reliability and validity. Section 3 will present the findings, with an assessment against those of previous scholarly studies. I will also discuss how my findings apply to professional practice, social change implications, and recommendations for action and further research. Section 3 will conclude with a reflection of my experiences in the DBA program.

Section 2 includes the research method and design, justification of the number of participants, the role of the researcher, and adherence to ethical standards. Section 2 also contains information regarding the data collection, data organization, and data analysis approaches. A discussion regarding actions taken to ensure research reliability and validity will conclude the section.

The purpose of this qualitative multiple case study is to explore strategies that small business owners use to obtain a working capital line of credit for business continuity. From an overarching population of small business owners in Maryland, I will interview five small business owners who achieved success in obtaining a working capital line of credit for business continuity. The implication for social change is that the findings of this proposed study might help small business owners to access a working capital line of credit to remain sustainable and grow beyond 5 years of operation. Continued business operation will lead to continued employment opportunities, which could increase the standard of living and well-being of citizens in local communities.

As a 20-year career credit union banker in the department of underwriting small business loans, I have personal experience and expertise on the topic and the research area. To reduce the likelihood of bias, I will continually strive to remain objective, not letting my professional position conflict with my role as a researcher, despite my relationships with banking and business associations and affiliations. I will remain open to all uncovered evidence and mitigate personal bias.

Personal bias is a clear threat to research credibility. Henriques (2014) advocated for the researcher to recognize personal bias and subjectivity to avoid ignoring perceptions or preconceived notions of the problem. Mitigating bias and subjectivity involves the use of bracketing, or epoche, as part of the data collection, interpretation, and presentation process (Moustakas, 1994). As a transcendental approach, the Greek word epoche means to refrain from or set aside preconceptions or judgments of experience, knowledge, beliefs, or meanings, thus ensuring unbiased results (Onwuegbuzie et al., 2012). With my extensive understanding of the phenomenon under study, I must suspend prejudgment and remain objective to achieve trustworthy findings.

Researchers must also adhere to specified ethical guidelines, such as those outlined in the Belmont Report (National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research, 1979) and Ethics in Research with Human Participants (Sales & Folkman, 2000) published by the American Psychological Association. As the researcher in this study, I must maintain respect, beneficence, and justice for all participants. In addition, I must keep separate my professional role as a small business lending consultant and my researcher role of soliciting small business owners.

Semistructured interviews are an appropriate means of qualitative data collection (Baškarada, 2014; Cronin, 2014; Stake, 1995). Due to the open-ended nature of the interview questions, I will have the opportunity to ask follow-up inquiries, as needed, to uncover all information needed to answer the research question. An interview protocol will guide each interview, ensuring consistency in asking the same interview questions of each participant in the same order. An interview protocol is a uniform way for a researcher to gather comparable data from participants (Devotta et al., 2016). During face-face data collection, a researcher can take notes to document participants’ nonverbal behaviors and make observations not captured by audio recording (Chongo et al., 2018). I will do my best to be neutral and watch my body language to avoid influencing the respondent. Furthermore, I will use bracketing to mitigate my assumptions, preventing them from infringing upon data collection, analysis, and interpretation. I will transcribe all recordings after each interview, subsequently importing files into NVivo software to assist with data manipulation and interpretation. According to Walden University protocol, I will store all digital data and papers for 5 years after this study before destroying them.

To be eligible for the proposed study, individuals must be small business owners of a manufacturing and wholesale small business located in Maryland that employs 500 or fewer employees and has been in operation longer than 5 years. In addition, participants must have successfully obtained a working capital line of credit for business continuity. Because of my professional experience as a credit union banker underwriting loans for small and medium-sized enterprises, I have contacts with small business owners whom I can ask to take part in my study. The first step in establishing a working relationship with prospective participants will be contacting them by telephone. I will discuss the general purpose of the study, including the participation process and implications for business practice. I will develop a rapport with participants, treating them with respect and offering to answer any questions they may have. Upon their confirmation of interest, I will schedule a brief preliminary meeting at a time and place convenient to the business leaders, in person or by telephone, to confirm they meet the criteria for participation. I will supply qualified participants with an informed consent form (see Appendix A), which we will review together. At this point, we will schedule a mutually convenient date, time, and location to meet for the semistructured interview. I anticipate interviews will occur at the participants’ place of business or in a private conference room at a local library.

I will continue to call qualified individuals until I obtain five small business owners meeting the appropriate criteria who are willing to participate in my study. When we meet for the interview, I will provide an informed consent form (see Appendix A) to explain the research, present the risks and benefits of being in the study, and outline the expectations and requirements. Included in the consent form is a reminder that participation is voluntary, and individuals are free to leave the study at any time without consequence. By signing the informed consent form, the small business owners will agree to the terms of participation and allow me to audio record the interviews.

The research method and design act as blueprints connecting the elements of research to the process of exploring questions and drawing conclusions (Leedy & Ormrod, 2013). Qualitative researchers seek to describe participants’ experiences as accurately as possible (Baškarada, 2014; Sandelowski, 1997; Yin, 2017) rather than using numbers to describe the phenomena of interest (Landrum & Garza, 2015; White et al., 2012). Qualitative methodology enables a researcher to understand a particular occurrence from the perspective of those who have experienced it (Baškarada, 2014; Sandelowski, 1997; Vaismoradi et al., 2013; Yin, 2017). Exhaustive qualitative research involves exploring the experiences of participants descriptively, through self-awareness or interactive interpretation, to frame a need for change or reform (Walker & Taylor, 2014). The basis of qualitative research is comparing and contrasting views under different realities (Bahari, 2012).

I considered and rejected quantitative and mixed methods approaches for this study. Researchers use the quantitative method to produce generalizable findings and test the relationships and differences between variables and constructs (Landrum & Garza, 2015; Parry et al., 2014; Yin, 2017). Quantitative research involves analyzing identified variables to determine a correlation, significance, or relationship and then testing theories using hypotheses (Antonakis et al., 2014; Westerman, 2014). Quantitative researchers focus on analyzing statistical data and may fail to obtain information on participants’ experiences, mindsets, or strategies (Thamhain, 2014). The quantitative method did not align with the purpose of this study; therefore, I rejected that approach.

A mixed methods approach enables integrating qualitative and quantitative data in a single study (Petticrew et al., 2013). Researchers using mixed methods gather distinct contributions from both qualitative and quantitative research methodologies (Bryman & Bell, 2015; Fetters & Molina-Azorin, 2017; McCusker & Gunaydin, 2015). Because quantitative methodology does not align with the purpose of this study, mixed methods is also inappropriate. A qualitative approach is the most appropriate to explore in-depth the strategies small business owners use to obtain a line of credit to sustain their business beyond 5 years.

A case study design enables a researcher to frame one or more cases in real-life settings to holistically and deeply explore a phenomenon (Marshall & Rossman, 2016; Merriam, 1998; Yin, 2017). The justification for utilizing a case study instead of another design is that the case study allows the researcher to answer the central research question from the perspectives of individuals who have direct experience with the concept of study. A qualitative case study is an optimal approach because I will be exploring a phenomenon in a real-life context.

Other qualitative research designs include ethnography, phenomenology, and narrative (Marshall & Rossman, 2016; Miles et al., 2014; Onwuegbuzie et al., 2012). Ethnographic researchers explore and analyze a problem contextualized through observations and interviews within a historical and cultural setting (Marshall & Rossman, 2016; Vesa & Vaara, 2014) to understand the values, language, and beliefs of a culture, group, or individual (Marshall & Rossman, 2016; Robinson, 2014). Phenomenology entails participants describing personal lived experiences, perspectives, or knowledge of a problem concretely without abstract generalization (Marshall & Rossman, 2016; Walker, 2012). In essence, phenomenology enables a researcher to explore the essence of participant experience via interview and observation (Kafle, 2013; Marshall & Rossman, 2016). Finally, narrative researchers collect data through observation, documentation, questionnaires, interviews, photos, or artifacts to contextualize participant experience (Marshall & Rossman, 2016; Petty et al., 2012). Narrative design creates an opportunity for the researcher to delve deeply into participants’ life experiences and contextualize understanding of the problem under study (Marshall & Rossman, 2016; Venkatesh et al., 2013). I will not be exploring cultures, seeking concrete descriptions of lived experiences, or contextualizing participant experiences. Accordingly, I rejected ethnography, phenomenology, and narrative designs in favor of the case study approach.

Participants in this case study will be five small business owners in Maryland who obtained a working capital line of credit for business continuity beyond 5 years of operation. The two key considerations that guide sampling in qualitative research are appropriateness and adequacy to answer the research questions (O’Reilly & Parker, 2013). Purposive sampling is a nonprobability method allowing researchers to solicit participants based on their knowledge of and experience with the phenomenon under study (Barratt et al., 2015; Petty et al., 2012; Yin, 2017). A purposive sampling approach is the best way to explore the strategies used by small business owners to obtain a working capital line of credit within a changing business environment.

In qualitative inquiry, the aim is not to acquire a fixed number of participants but to gather enough depth of information to fully describe the phenomenon (O’Reilly & Parker, 2013). Saturation is a systematic guideline to ensure researchers have collected all data necessary to understand the meaning participants give to their statements. Data saturation is evidence of rigor in qualitative research (Constantinou et al., 2017). Saturation occurs when continued data collection generates no new information (O’Reilly & Parker, 2013). I will be able to confirm saturation as I code and thematically analyze data from participant interviews and document reviews, finding no new information emerging as I approach the end of data analysis.

To be eligible for this study, individuals must meet the following selection criteria: (a) own a small manufacturing and wholesale business in Maryland, (b) employ 500 or fewer people, (c) have been in business at least 5 years, and (d) have successfully obtained a working capital line of credit for business continuity. After our initial telephone call to discuss the study and gauge participants’ interest, I will arrange a brief, face-to-face preinterview to ensure individuals are appropriately qualified for this study. After this meeting, I will supply qualified participants with an informed consent form (see Appendix A), which we will review together. At this point, we will schedule a mutually convenient date, time, and location to meet for the semistructured interview. I anticipate interviews will occur at the participants’ place of business or in a private conference room at a local library.

Informed consent is a necessary component of ethical research to ensure participants are fully aware of what the study entails, their rights to confidentiality and fair treatment, and the fact that participation is voluntary, allowing them to withdraw at any time. Before beginning each interview, I will again review the informed consent form (see Appendix A) with participants, answering any questions they may have. In addition to giving their signed permission to conduct the interview, participants will also be authorizing the audio recording of the interview. Should they choose to withdraw their participation, individuals may send an email to my Walden University address, listed on the informed consent form. No reason for the withdrawal is necessary. Upon receipt of such notification, I will immediately shred any material related to the withdrawn participant, delete any audio recordings, and remove any collected or analyzed data from consideration. There are no incentives to participate.

I will adhere to the highest values in academic research regarding the ethical protection of participants. These include displaying respect, following through on commitments, and strictly complying with protocol and consents to ensure no stress or harm to participants (Rubin & Rubin, 2012). I will follow the principles of beneficence, justice, and respect for persons as dictated by the Belmont Report (National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research, 1979). Respect for participants is providing transparency in the research process and objectives. During data collection, researchers should avoid relationships that could impair professional performance or harm participants, discuss potential risks and benefits of the research with participants, and share contacts to reach out with further questions (Ellis-Barton, 2016; Mondragon Barrios et al., 2017). I will maintain the highest ethical standards with particular emphasis on ensuring participants’ protection. Before applying for Walden University Institutional Review Board permission, I will complete the National Institute of Health Protection Human Research Participants course, which emphasizes ensuring participants’ protection.

The means of archiving data is another ethical consideration. Data archiving is a process of securing, preserving, and storing research data and resources for a future audit, allowing others to verify findings or advance research (Corti, 2012). I will password-protect and store all data—including signed informed consent forms, electronic records, company documents, handwritten notes, and hard copies of transcripts and findings—on a thumb drive or in a folder, which I will retain in a secure, fireproof vault for 5 years. After this time, I will erase and destroy the files.

Before each interview, I will again assure participants that their identities will remain confidential. I will use alphanumeric codes instead of names on all research data (e.g., P1, P2, etc.), including interview recordings, handwritten notes, transcripts, NVivo files, and research write-ups. I will scrub company names and other identifying information from public or participant-provided documents before review and note-taking. To further protect the identities of participants, no names will appear in the final dissertation.

In qualitative studies, a researcher serves as the instrument for data collection (Leedy & Ormrod, 2013). Accordingly, my role as the researcher is that of data collection instrument, gathering information to better understand the strategies small business owners use to acquire a working capital line of credit. I will follow an interview protocol (see Appendix B) in conducting face-to-face, one-on-one semistructured interviews with open-ended questions. The use of an interview protocol ensures the researcher asks the same basic questions of all participants (Yin, 2017); open-ended questions provide an opportunity for follow-up questions or probing. The interview protocol in this study contains dialogue guides and standard queries that will be the same for all participants. To increase the reliability of data collection, I will use Yin’s (2017) protocol framework, which includes an overview, data collection procedures, data collection questions, and a guide for the case study report.

As the data collection instrument, I will take steps to further enhance the reliability and validity of the semistructured interviews. After transcribing interviews, researchers often use transcript review to confirm understanding, allowing participants to review transcripts of their interviews to clarify their answers or provide additional information (Harvey, 2015). Member checking—allowing participants to confirm the accuracy of codes, themes, and study findings—is a quality control technique to enhance the accuracy, credibility, and validity of the data collection instrument and research findings (Cope, 2014; Harper & Cole, 2012; Harvey, 2015). I have elected to conduct member checking in lieu of an intrusive transcript review to enhance the reliability and validity of my study.

Semistructured interviews and document reviews will be the two techniques used for data collection. Face-to-face, one-on-one semistructured interviews will occur at the participants’ place of business or in a private room at a local library, according to their preference. I will begin each interview with a review of the informed consent form (see Appendix A), which I will have participants sign after asking any questions they may have. Six open-ended questions comprise the interview protocol (see Appendix B), by which I will ensure each participant receives and responds to the same questions. The open-ended nature of inquiries allows me to ask any probing or follow-up questions necessary to obtain sufficient information to answer the research question.

I will use conversational language and industry-specific jargon to create a relaxed environment and support follow-up questions. By signing the informed consent form, participants will allow me to audio record the interviews. Audio recording and subsequently transcribing interviews verbatim is vastly superior to relying solely on manually documented notes, which may not only be open to interpretation but distract the researcher from paying attention during interview sessions (Oltmann, 2016). Therefore, the present study will incorporate audio recording as the best way of ensuring accurate capture of participant responses, supplemented by handwritten nonverbal observations, such as expressions or gestures.

Collecting data from semistructured interviews has both advantages and disadvantages. Using face-to-face, semistructured interviews lets researchers keep an open mind, enabling concepts and theories to emerge from the data through an inductive approach (Bryman & Bell, 2015). In-person interviews provide an advantage in enabling researchers to witness facial expressions and gestures, which may add meaning to the responses (Babbie, 2015; Brayda & Boyce, 2014; Rubin & Rubin, 2012). The flexibility of semistructured interviews allows a researcher to refocus the questions or prompt for more information, as needed, to obtain quality data sufficient to answer the research question (Baškarada, 2014; Oltmann, 2016). In addition, asking open-ended questions gives participants discretion in responding (Rubin & Rubin, 2012).

A disadvantage of semistructured interviews is the potential to miss unexpected or surprising evidence (Baškarada, 2014). An inductive approach to theorizing and conceptualizing allows participants to answer interview questions less explicitly than they would in more structured research (Bryman & Bell, 2015). The common pitfalls that can threaten an effective interview include misinterpreting or misunderstanding questions and answers (e.g., due to personal prejudices or convictions), asking leading or loaded questions, interjecting comments that could bias the response, listening only to what is easy to understand, and making assumptions based on prior responses (Baškarada, 2014).

Additional data will come from a review of publicly available and participant-provided company documents. I will procure any online or government-filed documents upon securing the individuals’ agreement to participate in the study. During our initial qualifying meeting, I will ask each small business owner for any other documents that are not proprietary or confidential. The only documents I will save and print will be those scrubbed of identifying information, including company, owner, and shareholder names. The information gleaned from these documents will allow me to expand upon the data offered by participants in their interviews.

Researchers use member checking to improve the trustworthiness of their findings (Cope, 2014; Harper & Cole, 2012; Harvey, 2015), thus affirming the accuracy and credibility of the study (Thomas & Magilvy, 2011). I will schedule a second meeting with all five participants to perform member checking, reviewing my preliminary findings and themes for accuracy and completeness. The feedback I receive will reaffirm my interpretations or lead me to revisit some of my findings.

Without a case study database, commingling case study narratives with data interpretations could render inspecting raw data nearly impossible (Yin, 2017). Therefore, I will keep a separate and organized database with a compilation of data, research log, reflective journal, and field documents, which could provide for the inspection of raw data leading to researcher conclusions.

I will import all interview transcripts into NVivo for easy storage and organization. I can use the program to create charts, graphs, word clouds, and other visual aids to assist in managing data and capturing emerging understandings. I will continue to maintain a research log, documenting step by step the processes of the study to provide a detailed audit trail for subsequent replication. I will also keep a reflective journal in which I write down my thoughts, impressions, and opinions; this will allow me to continue to check for personal bias and implement bracketing, as needed.

Maintaining the safety, security, confidentiality, and accessibility of data is the foremost objective in data storage (Whitlock et al., 2010). All paper and electronic copies of my research, including emails, interviews, journals, field notes, audio recordings, and references, will remain securely stored in a fire-, water-, and theft-proof safe for 5 years. In accordance with Walden University guidelines, I will shred and delete all raw data after that period.

I will follow Yin’s (2017) five-step data analysis process of (a) collecting the data, (b) separating the data into groups, (c) regrouping the data into themes, (d) assessing the information, and (e) developing conclusions. I will read and reread each transcript, highlighting particularly relevant words or phrases and taking notes when such phrases appear across transcripts; this is a process known as coding (Saldaña, 2015; Suter, 2012; Yin, 2017). Case study data analysis consists of examining, categorizing, tabulating, testing, or otherwise recombining evidence to draw empirically based conclusions (Rademaker et al., 2012), all of which I will follow with this study.

During analysis, I will divide data into manageable pieces to reconstruct and reflect a view of reality. The initial step will be reading interview transcripts, company documents, observational notes, and any other relevant documents as a means to formulate initial categories, themes, and relationships. I will use Microsoft Word for transcribing, highlighting, and commenting on all transcripts, later transferring passages to NVivo for sorting and coding. Throughout this process, I will conduct journaling, taking notes in the form of memos to record my interpretations of transcribed data.

Pattern matching involves comparing predicted patterns or effects with empirically observed effects, allowing researchers to identify variances or gaps (Baškarada, 2014). As the best analysis method to match and analyze data, pattern matching is the most applicable technique for this case study. When I am confident I have identified all commonalities, I will import them into NVivo for ease in organization and sorting. Qualitative researchers use NVivo software to examine data for insight, coding, thematic analysis, and findings (Robins & Eisen, 2017), presenting results in various formats, including text, images, and mind maps (Woods et al., 2016). I will use NVivo 12 for identifying themes and interpreting the results.

Triangulation in data analysis entails seeking common findings among multiple data sources, which is another means to enhance the trustworthiness of qualitative findings (Azulai & Rankin, 2012; Yin, 2017). In addition to company document review and member checking, I will corroborate the interview data and themes with multiple data sources, including prior literature reviewed for this study or published in the interim.

Reliability and validity are critical to quantitative scientific rigor, ensuring researchers meet the highest standards of academic research (Noble & Smith, 2015). Both validity and reliability are components of trustworthiness (Miles et al., 2014). Reliability and validity are necessary for a quality study (Leung, 2015).

In a qualitative case study, dependability is the equivalent of quantitative reliability; in other words, if later researchers repeat the study using the same procedures, they will find the same results (Baškarada, 2014; Guba, 1981; Yin, 2017). To enable replication, I will maintain a detailed audit trail of study processes, which is one way researchers achieve dependability. According to Korstjens and Moser (2018), dependability means deriving the results from participants’ experiences and information and not researcher bias; to this end, I will practice bracketing and journaling. I will use two additional means of establishing dependability: member checking and data triangulation.

Validity in research involves accuracy and the trustworthiness of data collection, analysis, and interpretation of the findings (Dennis, 2018). To ensure validity, qualitative researchers use credibility, transferability, and confirmability (Morse, 2015). Another technique to achieve credibility is data saturation (Birt et al., 2016), which occurs when participant-provided information is exhaustive enough such that no more themes emerge. I will take the following steps to ensure the validity of my findings.

Credibility

One component of accurate qualitative findings is credibility (Yin, 2017). Credibility refers to the level of objectivity and impartiality of research findings (Bradshaw et al., 2017), meaning they accurately reflect participants’ opinions and perspectives (Colorafi & Evans, 2016). I am responsible for maintaining the rigor of research and enhancing study credibility, which I may gain through prolonged engagement with participants. Additional ways I will ensure this study’s credibility will be member checking and data triangulation.

Transferability is the extent to which a study’s findings are applicable to other contexts or settings (Pozzebon et al., 2014). As the researcher, I will take steps to boost the transferability of findings. One means of improving transferability is maintaining in-depth, detailed documentation of the steps undertaken in the study, from the initial recruitment to the presentation of findings (Merriam, 1998; Morse, 2015). With this audit trail, I will enable a future scholar to determine the applicability of my results to a similar population or situation.

Another component of research quality, confirmability is the truthfulness and correctness of a study’s findings with the absence of researcher bias (Elo et al., 2014; Nowell et al., 2017; Yin, 2017). I will follow procedures to ensure data accuracy and use triangulation to support findings from the interviews with multiple sources of data, including field notes, company document reviews, and observations. I will maintain an audit trail, providing a solid methodological reference for other researchers to assess confirmability. I will also practice reflexivity and bracketing by keeping a diary to ensure findings reflect the participants’ perceptions and not my own.

Data Saturation

Saturation occurs when continued data analysis reveals the same recurring themes with no new ideas emerging (Constantinou et al., 2017; O’Reilly & Parker, 2013). Failure to reach data saturation calls into question the quality, reliability, and validity of the research (Nelson & Squires, 2017). I anticipate that five participants will be sufficient to achieve data saturation. I will confirm saturation as I code and thematically analyze data from participant interviews and document reviews. I expect that, before I complete coding all five transcripts, I will reach a point when no new themes are emerging.

The purpose of this qualitative multiple case study is to explore strategies that small business owners use to obtain a working capital line of credit for business continuity. The implication for social change is that identifying the success factors may enable more small businesses to obtain financing and continue business operation for 5 years or longer. Further, ensuring business continuity means more individuals will remain employed, thus contributing to the local economy.

As the researcher, I will serve as the data collection instrument, conducting one-on-one, semistructured interviews and reviewing company documents. I will implement bracketing to minimize the risk of bias. I will adhere to ethical guidelines in research to protect participants’ rights and maintain confidentiality by using alphanumeric identifiers instead of names. A critical step of data analysis is ensuring the reliability and validity of data; accordingly, I will take steps to increase the dependability, credibility, transferability, and confirmability of my study.

Criteria met by the five participants in this study are owning a manufacturing and wholesale small business in Maryland, employing 500 or fewer people, being in business at least 5 years, and succeeding in obtaining a working capital line of credit for business continuity. Collected data will come from one-on-one semistructured interviews and company document reviews. Data analysis will begin with coding, conducting multiple reads of the material as I highlight common words and phrases. I will next import files, notes, and preliminary codes into NVivo for ease in organization, identifying themes common across interviews. Member checking will be a means to confirm my initial findings.

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Abdelhadi, S., Bashayreh, A. G., & Alomari, M. W. (2019). The impact of export instability on economic growth: sample of MENA countries. International Journal of Economics and Business Research, 18(4), 429–435.

You are invited to take part in a research study about how small business owners in Maryland have been successful in acquiring a working capital line of credit to sustain their businesses beyond 5 years. The researcher is inviting owners of manufacturing and wholesale small businesses located in Maryland who employ 500 or fewer employees and have been in business longer than 5 years to be in the study. This form is part of a process called “informed consent” to allow you to understand this study before deciding whether to take part.

This study is being conducted by a researcher named Solomon Atamaya, who is a doctoral student at Walden University. You might already know the researcher as a credit union banker in the department of underwriting small business loans, but this study is separate from that role.

Background Information:

The purpose of this qualitative multiple case study is to explore the strategies that small business owners use to obtain a working capital line of credit for business continuity. Information from this study will expand understanding of the economic, social, cultural, and structural issues small businesses face in securing working lines of credit. Among the implications for social change are that more small business owners may be able to sustain operations, thus continuing to provide employment opportunities that could increase the standard of living and contribute to the well-being of citizens in the local communities.

Procedures:

If you agree to be in this study, you will be asked to:

· take part in a face-to-face, pre-interview meeting;

· participate in a 1-hour, face-to-face interview; and

· review a copy of my preliminary findings to confirm the accuracy of my analysis.

Here are some sample questions:

· What strategies did you use to obtain a working capital line of credit?

· What are the significant challenges you encountered in securing a working capital line of credit?

· How did you overcome the challenges you encountered in securing a working capital line of credit?

Voluntary Nature of the Study:

This study is voluntary. You are free to accept or turn down the invitation. No one at Walden University will treat you differently if you decide not to be in the study. If you decide to be in the study now, you can still change your mind later. You may stop at any time.

Risks and Benefits of Being in the Study:

Being in this type of study involves some risk of the minor discomforts that can be encountered in daily life, such as those from recalling memories and events. Minor risks may include fatigue, stress, or becoming upset. Being in this study would not pose a risk to your safety or well-being.

You will receive no direct benefits in participating; however, information you provide may help other small business owners in securing working lines of credit for business continuity. As a result, continued employment opportunities could increase the standard of living and improve the well-being of citizens in local communities. The research findings may be also be valuable to banking officials, government agencies, and creditors in understanding the challenges small business leaders face while trying to access credit.

Payment:

There is no payment for participating in this study.

Privacy:

Reports coming out of this study will not share the identities of individual participants. Details that might identify participants, such as the location of the study, also will not be shared. The researcher will not use your personal information for any purpose outside of this research project. Data will be kept secure on a password-protected thumb drive or folder retained in a secure, fireproof vault. Your confidentiality is assured, as no participant or company names will be used on any study material outside of this form; instead, I will use alphanumeric identifiers instead of names. Data will be kept secure for a period of at least 5 years, as required by the university.

Contacts and Questions:

You may ask any questions you have now. Or if you have questions later, you may contact the researcher via email at [email protected]. If you want to talk privately about your rights as a participant, you can call the Research Participant Advocate at my university at 612-312-1210. Walden University’s approval number for this study is IRB will enter approval number here and it expires on IRB will enter expiration date.

The researcher will give you a copy of this form to keep.

Obtaining Your Consent

If you feel you understand the study well enough to make a decision about it, please indicate your consent by signing below.

Permission to Audio Record

I would like your permission to audio record our interview. This will best enable me to accurately capture your words and meaning. If you do not wish to be audio recorded, you may still participate in the study.

If you consent to audio recording, please sign here: