Charles Sturt University (CSU) research is giving small to medium businesses new insight into how to get a loan.

PhD graduate Dr Mariya Yesseleva-Pionka identified important factors that facilitate small to medium enterprises (SME) access to debt funding. They include the business operation being in a legal form or structure and the use of financial performance measures by the SME.

"Factors such as collateral, income and cash flows, the character of the owner-manager and serviceability are also important in the lending decision," the CSU graduate said.

In the University's School of Accounting and Finance, Dr Yesseleva-Pionka examined what organisational factors and practices are crucial for these enterprises to get access to external finance.

"SMEs are the backbone of our economy, representing 90 per cent of the businesses in Australia," Dr Yesseleva-Pionka said.

"They play crucial roles in providing employment, contributing to economic growth, improving the quality of human resources, developing a culture of entrepreneurship and creating new business opportunities."

The research used data from the Australian Bureau of Statistics as well as the results of a survey of business bankers.

Dr Yesseleva-Pionka said access to finance is essential for the growth and development of the sector.

"At any stage of business development one of the key questions is how to fund growth and external finance is the main option for many businesses.

"Generally, SMEs find it difficult to access external finance because they lack the history and systems to demonstrate successful operation.

"I wanted to look into and find out what factors have the most impact on whether external financiers, usually banks, will lend to a SME.

"I concentrated on business characteristics because that is something that is under the direct control of owner managers and it's something they can actually improve."

Dr Yesseleva-Pionka was awarded her PhD Australian Small and Medium Sized Enterprises and their Access to External Debt Finance at a recent graduation ceremony in Sydney.

CSU is committed to high quality, competitive research that increases opportunities for regional communities, businesses and professions while finding solutions to big issues, with both local relevance and global impact.