The role of growth aspirations in SMME financing decisions

Abstract The literature suggests that growth aspirations positively influence SMME access to finance. However, a knowledge gap remained concerning the role of growth aspirations in SMME financing decisions. This study explored the role of entrepreneurs’ growth aspirations in their decision to apply for external finance. In addition, the study investigated the effect of intention to apply on entrepreneurs taking action to apply; and the effect of growth aspirations on entrepreneurs’ intentions and actions. We conducted in-depth interviews with 14 South African entrepreneurs. In parallel, an online survey collected quantitative data from 185 South African entrepreneurs conveniently sampled on LinkedIn, Facebook and WhatsApp. Interview findings suggest that growth aspirations motivate entrepreneurs to seek external finance. The evidence indicates that intention to apply for external finance has a positive effect on entrepreneurs taking action to apply. However, we found no empirical support for growth aspirations positively affecting intention to apply or entrepreneurs taking action to apply. We propose that future research investigates a mediating effect wherein perceived desirability mediates the effect of growth aspirations on entrepreneurs’ intention to apply for external finance. An improved understanding of the role of growth aspirations in SMME financing decisions can support policymakers and finance providers in guiding entrepreneurs who need external finance to grow their businesses.


Introduction
Small, Micro and Medium Enterprises (SMMEs) are expected to play a critical role in creating employment and driving economic growth (Global Entrepreneurship Monitor, 2020). The finance literature has established that SMMEs need access to finance to grow and compete effectively in their chosen markets (Kersten, Harms, Liket, & Maas, 2017). Despite the recognition that access to finance is vital for growth, SMMEs have difficulty accessing the external finance required to drive growth (International Finance Corporation, 2017). As a primary decision-maker, the entrepreneur plays a vital role in SMME financing decisions (Andersson & Tell, 2009).
Growing research shows that cognitive factors can affect SMME financing decisions and the extent to which entrepreneurs make use of the financing opportunities available to them (Bilgehan & Yusuf, 2014;Krueger, 2003). More specifically, research has shown that firms with higher growth objectives are more likely to apply for equity finance (Cosh et al., 2009;Fitzsimmons & Douglas, 2006). In their study of entrepreneurs' funding decisions, Fitzsimmons and Douglas (2006) found that growth intention is positively associated with entrepreneurs' decision to finance their businesses through equity capital. Similarly, Cosh et al. (2009) found that firms with stronger growth objectives are more likely to seek external finance. However, a knowledge gap remains concerning the role of growth aspirations in SMME financing decisions.
The explanatory mechanism underlying how growth aspirations affect SMME financing decisions is poorly understood. Moreover, studies investigating the effect of growth aspirations on financing decisions have focused on traditional sources of finance, including bank credit (Fitzsimmons & Douglas, 2006), trade credit and venture capital (Cosh et al., 2009). Public sector finance and emerging sources of finance such as crowdfunding and marketplace lending have received scant attention.
This research addresses this gap by using the intention construct to provide insight into the role of growth aspirations in SMME financing decisions. The study extends beyond bank credit, trade credit and venture capital by including alternative finance sources (crowdfunding, marketplace lending) and public sector finance sources (public sector grants, public sector loans, and public sector COVID-19 business support). The study draws on behavioural intention theory to answer the following research questions:

RQ2: What is the effect of growth aspirations on entrepreneurs' intentions and actions when seeking external finance?
We address the first research question by exploring entrepreneurs' decision-making process when seeking external finance. To provide a deeper insight into the role of growth aspirations in SMME finance decisions, we explore the needs that drive entrepreneurs to seek external finance, their goals, motivations and actions as part of this process. We address the second research question by testing hypotheses concerning the effect of growth aspirations on entrepreneurs' intention to apply and the action taken to apply for external finance.
We contribute to the literature by using the intention construct to provide insight into how entrepreneurs make and enact financing decisions. Further, we contribute to theory building by identifying the role of growth aspirations in SMME financing decisions. Identifying the role of growth aspirations in financing decisions is important since previous research suggesting that growth aspirations positively influence entrepreneurs' use of external finance fails to provide insight into the underlying process by which growth aspirations affect SMME financing decisions (Cosh et al., 2009;Wong et al., 2018). This paper adopts the following structure, adapted from Bulanova et al. (2016). First, we discuss the literature on SMME financing decisions and conceptualise growth aspirations. Following that, we draw on the theory of planned behaviour and the entrepreneurial event model to develop hypotheses concerning the effect of growth aspirations on entrepreneurs' intentions and actions when seeking external finance. In the methodology section, we describe the research design, the sample, measures and the data analysis methods used. Then we present findings from the interview, followed by survey results. The results section is followed by an integrated discussion of the results and considering this study's limitations. We conclude by highlighting potential areas for further research and the implications of the research findings.

SMME financing decisions
The importance of SMMEs in promoting economic growth and employment creation is widely documented in the literature (Global Entrepreneurship Monitor, 2020). Research has shown that access to finance is vital for SMMEs to compete and grow (Carbo-valverde et al., 2016;Carpenter, 2002;Cassar, 2004). In addition, Osano and Koine (2016) have shown that financial investment supports technology transfer for businesses operating in innovative industries, enabling them to contribute to economic growth. SMMEs with access to external finance achieve better performance (Keasey & Watson, 1992;Rehm & Xavier, 2016). SMMEs require different types of finance as they go through different phases of their lifecycle (Berger & Udell, 1998;Fraser, 2019). As primary decision-makers in SMMEs, entrepreneurs may opt to use internal finance to support business activities that drive growth when they have adequate funds (Adonia et al., 2018). However, in the absence of adequate internal funds, SMMEs can use external finance to support business activities (Macan Bhaird et al., 2016).
Entrepreneurs seeking to drive SMME growth must decide how they will finance business activities (Nguyen & Canh, 2021). Decision-making involves an individual choosing a specific option or a course of action among a set of alternatives based on specific criteria (Wang & Ruhe, 2007). Thus, SMME financing decisions are concerned with choosing a financing option among a set of alternatives based on specific criteria.
The literature on entrepreneurial finance has focused mainly on capital structure optimisation to explain SMME financing decisions (Bulan & Yan, 2010;Cosh et al., 2009;Poutziouris et al., 2022;Robb & Robinson, 2014). For example, the pecking order theory argues that firms prefer internal finance over external finance when in need of additional funds. They prefer debt over equity if internal finance is insufficient (Bulan & Yan, 2010;Myers, 1984;Paul et al., 2007). The financial growth paradigm purports that entrepreneurs choose to use different sources of finance at different stages of the business lifecycle (Berger & Udell, 1998, 2006. Studies that have adopted cognitive approaches to explaining SMME financing decisions argue that cognitive biases may affect how entrepreneurs make financing decisions (Adomdza et al., 2016;Bilgehan & Yusuf, 2014;Nguyen & Canh, 2021). Such studies recognise the central role of entrepreneurs and their motivations in SMME decisions (Andersson & Tell, 2009;Hessels et al., 2008;Levie & Autio, 2013). Following a review of the literature on psychological biases, 2014) concluded that cognitive factors could affect entrepreneurs' capital structure decisions and decisions to start a business or pursue business growth. This notion finds support in Adomdza et al. (2016), who investigated the effect of cognitive biases on financing decisions. They found that the cognitive bias of planning fallacy increases funding amounts while optimism and overconfidence do not affect finance amounts. Thus, cognitive factors can affect entrepreneurs as they make and act on financing decisions. This study provides insight into how entrepreneurs' growth aspirations affect SMME financing decisions.

Growth aspirations
Although there is a growing body of research aimed at understanding why and how entrepreneurs choose to pursue growth (Eide et al., 2021;Hanifzadeh et al., 2018;Henríquez-Daza et al., 2019;Yang & Meyer, 2019), there is no consensus on the definition of entrepreneurial growth aspirations. Autio and Acs (2007, p. 4) define growth aspiration as "the decision to aspire for growth". Douglas (2013) distinguishes between the growth intentions of nascent entrepreneurs and the growth aspirations of practising entrepreneurs, as the aspirations of practising entrepreneurs are informed by experience, while the growth intentions of nascent entrepreneurs are not. He defines growth aspirations as "an entrepreneur's intention to grow an existing business" (Douglas, 2013, p. 636).
Growth motivation (Delmar & Wiklund, 2008) and growth preference (Cassar, 2006) have also been used to describe the same concept. In an effort to bring conceptual clarity to a body of knowledge that is not well integrated, Hermans et al. (2015) argue that growth aspirations represent an entrepreneur's intrinsic desire for growth based on their attitude and subjective norms, while growth intentions represent the entrepreneurs' readiness to take the necessary action to drive growth. As this study seeks to explore the role of growth aspirations in SMME financing decisions, we adopt the recommendation by Hermans et al. (2015) and conceptualise growth aspiration as an entrepreneur's intrinsic desire for growth based on their attitude towards growth and subjective norms. The entrepreneurs' readiness to take action to apply for external finance in pursuit of growth is expressed as their intention to apply for external finance. Doing so improves conceptual clarity, avoiding overlap between the entrepreneurs' growth aspirations and intentions.

Behavioural intentions
Intention models provide insight into entrepreneurs' behavioural processes (Krueger, 2003). Intention is defined as "a process, state, or act of conscious willing in the present to make some experience true, realised, manifested, or created in the future" (Bird, 2015, p. 163). While decisions are concerned with selecting an option among a set of alternatives (Wang & Ruhe, 2007), intentions capture the individual's motivation to act, including how much effort the individual is willing to put in (Ajzen, 1991;Delmar & Wiklund, 2008). Several studies have shown that individuals form an intention before taking action (Ajzen, 1991;Bird, 1988Bird, , 2015Douglas et al., 2021;Krueger & Carsrud, 1993;Sheeran, 2002;Van Gelderen et al., 2015).
The construct of intention has been used to explain how individuals start a business (Douglas et al., 2021;Fitzsimmons & Douglas, 2011;Neneh, 2019;Schlaegel & Koenig, 2014) or grow their businesses (Hanifzadeh et al., 2018;Hermans et al., 2015;Neneh & Vanzyl, 2014). Entrepreneurs seeking external finance to grow their businesses adopt planned, intentional behaviour. Hence, the intention construct can be applied to exploring entrepreneurs' decision-making processes when seeking external finance (Schlaegel & Koenig, 2014). The entrepreneurial event model (EEM) explains how intentions are formed, proposing that intentions are derived from perceptions of desirability and feasibility and form based on the individual's propensity to act upon opportunities (Shapero & Sokol, 1982). Perceived desirability represents the individual's perception of the relative attractiveness of an option (Katz, 1992), while perceived feasibility represents the degree to which the individual feels capable of acting. The propensity to act signifies the individual's disposition to act on their decisions (Shapero & Sokol, 1982).
The theory of planned behaviour (TBP) has been used to explain behaviour in different contexts (Ajzen, 2011). The theory states that the attitude toward a specific behaviour, subjective norms and the individual's perception of the control to perform the behaviour work together to shape their intentions and actions (Ajzen, 1991). The current research uses constructs from the EEM and TBP to explore entrepreneurs' decision-making processes when seeking external finance. This research investigates entrepreneurs' intention to apply for external finance, its association with growth aspirations and with entrepreneurs taking action to apply. Insight into how growth aspirations contribute to entrepreneurs using external finance is important as not all entrepreneurs want to grow their businesses , and not all entrepreneurs who need additional funds apply for external finance (Kon & Storey, 2003).

Development of hypotheses and conceptual framework
Previous studies have shown that when undertaking intentional behaviour, intentions precede action (Douglas et al., 2021;Krueger & Carsrud, 1993;Schlaegel & Koenig, 2014). Moreover, intention has been shown to predict action (Sheeran, 2002;Van Gelderen et al., 2015). We suggest that entrepreneurs seeking external finance form an intention to apply before taking action to apply for external finance. We hypothesise: Hypothesis 1: Entrepreneurs' Intention to apply for external finance has a positive effect on them taking action to apply for external finance.
Research has shown that entrepreneurs who intend to grow their businesses view external finance as an enabler of growth (Fitzsimmons & Douglas, 2006). Drawing from the TPB, we suggest that entrepreneurs with high growth aspirations have a positive attitude towards external finance, contributing to the formation of an intention to apply for external finance. We hypothesise: Hypothesis 2: Growth aspirations have a positive effect on entrepreneurs' intention to apply for external finance.
Lastly, previous studies have shown that entrepreneurs' desire for growth has a direct and positive impact on their actions to pursue growth (Eide et al., 2021;Hanifzadeh et al., 2018). Moreover, research has found that entrepreneurs with high growth objectives are more likely to seek external sources of capital (Cosh et al., 2009;Fitzsimmons & Douglas, 2006). We hypothesise: Hypothesis 3: Growth aspirations have a positive effect on entrepreneurs taking action to apply for external finance.

Methodology
Data for this study were collected from December 2020 to May 2021 through in-depth interviews and an online survey conducted in parallel. The sample comprised entrepreneurs operating SMMEs in South Africa who needed external finance to support business activities. In-depth interviews explored the entrepreneurs' decision-making process when seeking external finance, including the needs that drove them to seek external finance, their goals, motivations and actions. We successfully collected qualitative data from fourteen (14) entrepreneurs interviewed using Zoom video conferencing capability. To maintain confidentiality, each interview participant was assigned a pseudonym to refer to them when presenting findings.
The online survey investigated the effect of entrepreneurs' intention to apply on taking action to apply and the effect of growth aspirations on entrepreneurs' intentions and actions. We collected data from one hundred and eighty-five (185) entrepreneurs conveniently sampled from LinkedIn, Facebook and WhatsApp social networking platforms. Using social media to recruit research participants can enable rapid data collection from geographically dispersed participants at a low cost (Chenane & Hammond, 2022;Stokes et al., 2019). However, it presents a greater risk of bias as age and socioeconomic status are driving forces on some platforms (Blank & Lutz, 2017). Hence, we adopted a multi-modal recruitment strategy which involved recruiting participants from three different platforms and using a public post together with private messages to broaden the reach to suitable participants and overcome the bias (McRobert et al., 2018;Stokes et al., 2019).

Measures
We used an interview guide to maximise the value of information collected from the interviews, direct the conversation, and ensure the information collected was complete and consistent across respondents (Harrell & Bradley, 2009). The interview guide comprised the following open-ended questions: 1. Demographic information: The entrepreneurs' age, gender and education level were collected. In addition, we collected the SMME sector, province, SMME age, number of employees, and annual sales revenue, which enabled us to compare interview findings with the survey results.
2. Reasons for seeking external finance: "Think back to the last time you needed to secure external finance for your business." a. "How much was needed?" b. "What did you need the additional finance for?" 3. Decision-making process: "Please describe your thought process from when you recognised the need to secure external finance for your business until you took action to address the need. Please highlight your goals, concerns, motivations and the actions you took as part of this process." Probing questions were asked to clarify or encourage entrepreneurs to provide more details as they described their thoughts and experiences.
The online survey collected the following data: (1) Demographic information: The online survey collected the same demographic information collected during the interviews.
(2) Reason for seeking external finance: Based on research conducted by Finfind (2017) and Seed Academy (2018), respectively, respondents were asked to select one option from a list which included: start a business, buy equipment, upgrade Business facilities, expand my business, finance a project/Contract, buy a franchise, buy stock, day to day business needs.
(3) Growth aspirations: We adapted a scale used by Wiklund and Shepherd (2003), Cassar (2007) and Bulanova et al. (2016) to measure growth aspirations. The scale consisted of three items: "I would like to double the number of people employed by the business in 5 years", "I would like to double sales revenue in 5 years", "In 5 years, I would like the business to be much larger than it is today". We used a seven-point Likert scale to collect responses wherein 1 indicated strong disagreement and 7 indicated strong agreement with the statement. Likert scale instruments are frequently used to measure psychological constructs. Data collected through a seven-point Likert scale can be treated as continuous data, enabling the researcher to draw inferences from the data using statistical analysis (Nemoto & Beglar, 2014). We performed confirmatory factor analysis using IBM SPSS Amos 25 to assess the validity and reliability of the scales used to measure growth aspirations and intention to apply for external finance. Confirmatory factor analysis results confirmed that the measure of growth aspirations demonstrated good construct validity (Refer to appendices). Moreover, Cronbach's alpha and composite reliability were equal to or greater than 0,70, indicating that the measures demonstrated high reliability (Taber, 2018;Hair et al., 2019). Further, the square root of the average variance extracted (AVE) exceeded intervariable correlation, indicating good discriminant validity (Fornell & Larcker, 1981).
(4) Intention to apply -We adapted intention scales used by Rhodes and Matheson (2005), Fatoki (2020) and Neneh (2019) to measure intention to apply for each type of external finance in the scope of the study. The scale consisted of 2 items: "To what extent did you consider applying for the following sources of finance?", "To what extent did you plan to apply for the following sources of finance?". Respondents selected an option from a 7-point Likert scale where 1 represented did not consider/plan to apply, and 7 represented strongly considered/planned. Respondents were allowed to submit responses for multiple sources of finance. As SMMEs require different types of finance as they go through different phases of their lifecycle (Berger & Udell, 1998;Fraser, 2019), we expected that some respondents would have formed an intention to apply for more than one type of external finance. Initial results of the confirmatory factor analysis suggested that intention to apply for a public sector grant was highly correlated to intention to apply for a public sector loan (maximum shared variance = 0, 728 for both variables and average variance extracted was 0,711 and 0,633 respectively). Based on this initial finding, we created a new variable (i.e., intention to apply for public sector finance), incorporating four items. We repeated confirmatory factor analysis following the creation of the new variable (see Table A1). Confirmatory analysis results confirmed that the measures of intention to apply demonstrated good construct validity. Cronbach's alpha and composite reliability were equal to or greater than 0,70, indicating that the measures demonstrated high reliability. Moreover, the measures demonstrated good discriminant validity (see Table A2) as the square root of the average variance extracted (AVE) exceeded the intervariable correlation.
(5) Taking action to apply -We used a categorical measure to collect data on the sources of external finance respondents applied for. Respondents were able to select multiple items from a list which included "Crowdfunding", "Online lending platforms (excludes banks)", "Venture capital finance", "Bank credit", "Credit from my supplier", "Public sector grant", "Public sector loan", "Public sector COVID-19 Business Support".

Data coding and analysis
We conducted thematic analysis to identify patterns or themes in the qualitative data (Braun & Clarke, 2006). The themes are presented with interview findings. Following quantitative data collection, we used Pearson product-moment correlation analysis and linear regression analysis to determine the association between growth aspirations and intention to apply for external finance, both interval variables (Courtney, 2018;Field, 2009). The analysis was conducted separately for each type of external finance included in the study. In addition, we used Eta correlation and logistic regression to test the association between intention to apply and taking action to apply, as well as the association between growth aspirations and taking action to apply. These methods were selected as they are suitable for evaluating an association between an interval variable and a categorical variable (Sage Publications, 2014;Sperandei, 2014). We integrated findings from the thematic analysis with the correlation and regression analysis findings to develop a multifaceted view of the role of growth aspirations in SMME financing decisions.

Interview findings
The interviews explored the entrepreneurs' decision-making process when seeking external finance, including the needs that drove them to seek external finance, their goals, motivations and actions. We present the participants' profiles and findings concerning entrepreneurs' reasons for seeking external finance and the role of growth aspirations in SMME financing decisions below. Table 1 presents the profiles of interview participants.

Reasons for seeking external finance
Participants reported seeking external finance for business expansion, purchasing equipment and optimising day-to-day operations. When elaborating on their reasons for seeking external finance, participants revealed that although they sought finance for business expansion, equipment purchase or day-to-day operations, the underlying motivation for seeking external finance was to lay a foundation for business growth. Table 2 summarises the perspectives shared by participants.
Thus, interview findings suggest that entrepreneurs seek external finance to support business activities intended to drive business growth.

Growth aspirations
As they sought external finance to support activities that drive business growth, we explored each participant's goals and motivations to develop a deeper understanding of their growth aspirations. Participants reported that they aspired to dominate the markets in which the SMMEs operate or maximise the profit generated by the business. In addition, some participants reported that they aspired to grow their businesses with the aim of selling them at a larger profit in future. Participants whose aspirations went beyond the desire to increase profit reported that they aspired to grow their businesses to empower others by creating employment, or they sought to enable a specific lifestyle they desired in the long term. Table 3 elaborates on participants' views: Thus, interview findings suggest that entrepreneurs aspire to grow their businesses to dominate the markets in which they operate, maximise the profit generated by the business or grow their businesses to sell at a larger profit in future. In addition, findings suggest that some entrepreneurs are motivated to grow their businesses to empower others through employment creation or to support a specific lifestyle they desire. Analysis of the relationships between themes showed that participants' reasons for seeking external finance are linked to their growth aspirations (See Figure  2). The interview findings suggest that entrepreneurs make a decision to seek external finance to fund activities that support business growth in order to achieve their growth aspirations. In other words, entrepreneurs' decision to seek external finance is motivated by their desire to achieve their growth aspirations.

The role of growth aspirations in SMME financing decisions
The process of applying for external finance can be complex, requiring entrepreneurs to take multiple actions over time. Participants reported encountering difficulties with the application process. However, participants further reported that their growth aspirations provided additional motivation to overcome the obstacles and act on their decision. The prospect of achieving their growth aspirations made external finance more desirable, such that participants remained resolute in their intention to apply for external finance even when faced with obstacles. Kabelo and Harris elaborate below: Our exploration of the role of growth aspirations in entrepreneurs' decision to apply for external finance suggests that growth aspirations positively motivate entrepreneurs to make and act on the decision to apply for external finance to support the desired business growth. Our findings further suggest that entrepreneurs with high growth aspirations perceive external finance as more desirable as it provides the means to achieve their growth aspirations. Thus, growth aspirations appear to positively influence entrepreneurs' intention to apply for external finance by increasing the desirability of external finance. This finding resembles the pattern in a mediated relationship where a mediating variable transfers the effect of an independent variable on a dependent variable (MacKinnon et al., 2007). We propose that the following is tested in future research: Proposition 1: Perceived desirability of a finance option mediates the effect of growth aspirations and entrepreneurs' intention to apply.

Survey results
The online survey investigated the effect of entrepreneurs' intention to apply on taking action to apply and the effect of growth aspirations on entrepreneurs' intentions and actions. We present a summary of the respondents' profiles and results concerning the effect of entrepreneurs' intention to apply on taking action to apply. In addition, we present results concerning the effect of growth aspirations on entrepreneurs' intention to apply and taking action to apply below.

Respondents' profiles
One hundred and eighty-five (185) entrepreneurs responded to the online survey. Figure 3 compares the age group of SMMEs represented in the survey to those that participated in the interviews.
The age distribution of SMMEs that participated in the survey was similar to those in the interviews. 69,2 % of businesses in the survey had operated for less than five years, while 85,8% of businesses represented in the interviews had operated for five years or less. Most businesses in this study had operated for less than five years. In addition, we compared the number of people employed by SMMEs represented in the survey with those that participated

Goals and motivations Participant quotes
Create employment Those who were not only motivated by economic profit reported that they aspired to grow their businesses to empower others by creating employment.
• "In the next three to five years, I would like to recruit a minimum of ten (10) Figure 4 shows that 74,6% of survey respondents employed less than five people, while 78,6% of interview participants employed less than five people. Thus, most SMMEs represented in the study were younger than five years and employed less than five people.

Reasons for seeking external finance
Most survey respondents (27,3%) reported that they needed external finance to drive business expansion, followed by 19,7% who reported needing additional funds to buy equipment. 15,8% of respondents needed external finance to start a business, while 10,4% needed additional funds to finance day-to-day business operations. Entrepreneurs who needed external finance to secure a new project or contract were the minority, accounting for 8,7% of survey respondents. While there was a greater emphasis on equipment purchase among interview participants (See Figure 5), the reasons for seeking external finance were similar across survey respondents and interview participants. Most participants in this study sought external finance to fund equipment, business expansion, day-to-day business needs, and a new business or project.

Growth aspirations
Respondents' growth aspirations were indicated by the extent to which they wished to double the number of people employed, double sales revenue, or double the size of their business. As shown in Figure 6, a vast majority of survey respondents (84,9%) reported a strong aspiration to double  the size of their business, followed by a significant proportion (78,4%) that aspired to double sales revenue within five years. Only 55,1% of respondents felt strongly that they would like to double the number of people employed in their business.

The effect of entrepreneurs' intentions to apply for external finance on them taking action to apply
Hypothesis 1 tested the effect of entrepreneurs' intention to apply for external finance on them taking action to apply. We used the Eta coefficient to determine the direction and strength of the association between entrepreneurs' intention to apply for external finance and taking action to apply. Table 4 presents the results.
According to Sage Publications (2014), eta coefficient (ƞ)values between 0,4 and 0,69 indicate a medium strength association, while values greater than 0,7 indicate a strong association. Based on the results in Table 5, we found a strong association between entrepreneurs' intention to apply for external finance and taking action to apply for crowdfunding, bank credit and public sector  finance. In comparison, we detected a medium-strength association for marketplace lending, venture capital, trade credit and public sector COVID-19 business support. We then conducted multivariate logistic regression to quantify the effect of entrepreneurs' intention to apply on them taking action to apply for external finance. We analysed the association of all variables together to avoid confounding effects (Sperandei, 2014). In this process, we generated several models for each type of external finance, starting with the null model with no predictors. We added control variables in each step (entrepreneurs' age group, gender and education level, number of employees and annual sales revenue), then added intention to apply and growth aspirations to generate the full model. The results of the multivariate logistic regression are presented in Table 5.
The chi-squared test for the logistic regression models yielded a significance value of p < 0,01, indicating that the models presented a significant improvement in fit relative to the null model at the 0,01 significance level. The full model for each type of external finance studied was more than 80% accurate in predicting the outcome.
The output of logistic regression is an odds ratio, which measures effect size and provides information about the strength of an association between two variables (McHugh, 2009). An odds ratio equal to 1 indicates that the predictor variable does not affect the outcome such that the odds of a specific outcome are the same for two groups. An odds ratio greater than 1 indicates that the odds of a group producing a specific outcome increase with each increment in the predictor variable, while an odds ratio less than 1 indicates that the odds of the group under investigation producing a specific outcome decrease with each increment in the variable under investigation (McHugh, 2009).
The odds ratios generated in the full model for each type of external finance were greater than 1, suggesting that across the different types of external finance included in the study, the odds of entrepreneurs taking action to apply increase as their intention to apply increases. The odds of entrepreneurs taking action to apply were highest for crowdfunding, with an odds ratio of 3,94.  This means that for each increment in the entrepreneurs' intention to apply, entrepreneurs are 3,94 times more likely to apply for crowdfunding. The results also show that the odds of entrepreneurs taking action to apply for marketplace lending, venture capital, bank credit and public sector finance increased by a factor of 2 or more with each increment in their intention to apply. Notably, the odds ratio for public sector COVID-19 business support was the lowest among the types of external finance studied.
The null hypothesis for logistic regression states that there is no statistically significant relationship between the predictor variable and the outcome variable. We reject the null hypothesis as the effect of intention to apply on entrepreneurs taking action to apply is statistically significant (p < 0,01) across each type of external finance. The results provide empirical support for Hypothesis 1.

The effect of growth aspirations on entrepreneurs' intention to apply for external finance
Hypothesis 2 tested the effect of growth aspirations on entrepreneurs' intention to apply for external finance. We used Pearson Product Moment correlation (r) to determine the direction and the strength of the association between growth aspirations and entrepreneurs' intention to apply. Table 6 presents the results.
Correlation results presented in Table 6 show that growth aspirations and intention to apply for external finance are negatively correlated for marketplace lending, bank credit, public sector finance and public sector COVID-19 business support. Thus, the direction of the association is such that entrepreneurs' intention to apply for these types of finance decreases as their growth aspirations increase. Conversely, growth aspirations and intention to apply for crowdfunding, venture capital and trade credit are positively correlated. Thus, entrepreneurs' intention to apply for these types of finance increases as their growth aspirations increase.
The Pearson Product Moment Correlation coefficient (r) indicates the strength of the association between two variables (Courtney, 2018). According to Cohen (1992), r = 0,10 indicates a small effect, while r = 0,30 indicates a medium effect. Based on the results presented in Table 7, there is a negligible correlation between growth aspirations and entrepreneurs' intention to apply for external finance across all the types of external finance in the scope of the study. Moreover, the correlation is not statistically significant (p > 0,05). Linear regression is required to determine the effect of one interval variable on another. The null hypothesis for linear regression states that no statistically significant relationship exists between the predictor and outcome variables. We failed to reject the null hypothesis because we found no evidence of a statistically significant linear relationship between growth aspiration and intention to apply for external finance. Given our finding, the assumption of a linear association between the predictor and outcome variable (Courtney, 2018;Field, 2009) was not met. Thus, we did not proceed with linear regression. We found no empirical evidence for hypothesis 2.

The effect of growth aspirations on entrepreneurs taking action to apply for external finance
Hypothesis 3 tested the effect of growth aspirations on entrepreneurs taking action to apply for external finance. We used the Eta coefficient to determine the direction and strength of the association between entrepreneurs' growth aspirations and taking action to apply for external finance. Table 7 presents the results.
The results show a medium-strength association between growth aspirations and entrepreneurs taking action to apply for crowdfunding and public-sector COVID-19 business support. In addition, the results show that the association between growth aspirations and entrepreneurs taking action to apply for marketplace lending, venture capital, bank credit, trade credit and public sector finance is weak (Sage Publications, 2014). After establishing the association between growth aspirations and entrepreneurs taking action to apply for external finance, we conducted multivariate logistic regression to quantify the effect of entrepreneurs' growth aspirations on them taking action to apply for external finance. Results in Table 7 show odds ratios greater than 1 for crowdfunding, marketplace lending and venture capital. This indicates that the odds of entrepreneurs taking action to apply for crowdfunding, marketplace lending and venture capital increase as their growth aspirations increase. On the contrary, the odds ratios for bank credit, trade credit, public sector finance and public sector COVID-19 business support were less than 1. Odds ratios less than 1 suggest that the odds of entrepreneurs taking action to apply for the above-mentioned types of external finance decrease as their growth aspirations increase. These results suggest that growth aspirations have a positive effect on entrepreneurs taking action to apply for crowdfunding, marketplace lending and venture capital. The results also suggest that growth aspirations negatively affect entrepreneurs taking action to apply for bank credit, trade credit, public sector finance and public sector COVID-19 business support.
While the odds ratios suggest that growth aspirations affect entrepreneurs taking action to apply for external finance, the variability in the 95% confidence intervals suggests that the findings are not statistically significant. Further, we fail to reject the null hypothesis since the significance value associated with each odds ratio is greater than 0,05 (p > 0,05). Therefore, hypothesis 3 is not supported by the results.

Discussion
This study explored the role of entrepreneurs' growth aspirations in their decision to apply for external finance. In addition, we investigated the effect of entrepreneurs' intention to apply for Interview findings suggest that growth aspirations motivate entrepreneurs to make the decision to apply for external finance and act on that decision by applying to finance providers who offer crowdfunding, marketplace lending, venture capital, bank credit, trade credit, public sector finance and public sector COVID-19 business support. This finding is consistent with Fitzsimmons and Douglas (2006), who found that growth intention is positively associated with entrepreneurs' decision to finance their businesses through equity. In addition, this finding supports Wong et al. (2018), who showed that goals influence entrepreneurs' financing decisions and actions. We extend the current literature by showing that entrepreneurs are motivated by their growth aspirations to make the decision to seek external finance beyond conventional equity finance.
Drawing from the entrepreneurial event model (Shapero & Sokol, 1982) and the theory of planned behaviour (Ajzen, 1991), we hypothesised that entrepreneurs formed an intention to apply before taking the necessary action to apply for external finance. Hypothesis 1 tested the association between entrepreneurs' intention to apply with taking action to apply for external finance. We found empirical support for this hypothesis as survey results showed a strong association between entrepreneurs' intention to apply for external finance and taking action to apply for crowdfunding, bank credit and public sector finance. In comparison, we found evidence of a medium-strength association for marketplace lending, venture capital, trade credit and public sector COVID-19 business support. Moreover, we found that entrepreneurs' odds of applying for crowdfunding, marketplace lending, venture capital, bank credit, trade credit, public sector finance and public sector COVID-19 business support increase with each increment in their intention to apply (i.e., odds ratios>1). Through this finding, we show that intention to apply for external finance has a positive effect on entrepreneurs taking action to apply. This finding contributes to the current literature by using the intention construct to provide insight into how entrepreneurs make and enact financing decisions.
Hypothesis 2 tested the effect of entrepreneurs' growth aspirations on their intention to apply for external finance. Our results showed no statistically significant association between growth aspirations and entrepreneurs' intention to apply for external finance. This finding contradicts our interview findings which suggest that growth aspirations positively motivate entrepreneurs to make and act on the decision to apply for external finance. The finding further contradicts Aisaiti et al. (2019), who demonstrated that entrepreneurs' perception of the benefits of finance (i.e. finance as an enabler of growth) can positively enhance finance intention. The lack of empirical support for the effect of growth aspirations on entrepreneurs' intention to apply for external finance can be explained by the presence of a mediator variable. A mediator variable is a variable that is in a causal sequence between two variables, transferring the effect of an independent variable on a dependent variable (MacKinnon et al., 2007).
According to the entrepreneurial event model, the intention to perform a specific behaviour is affected by the individual's perception of the desirability and the feasibility of the behaviour, as well as the individual's propensity to act (Bulanova et al., 2016;Shapero & Sokol, 1982). An association between entrepreneurs' growth aspirations and their intention to apply for external finance might not be detected if it is an indirect effect (Warner, 2012) mediated by the entrepreneurs' perceptions of the desirability of the finance option. This explanation is supported by interview findings which suggest that growth aspirations positively influence entrepreneurs' intention to apply for external finance by increasing the desirability of external finance.
Hypothesis 3 tested the effect of growth aspirations on entrepreneurs taking action to apply for external finance. We found support for a positive association between growth aspirations and entrepreneurs taking action to apply for external finance. However, logistic regression results indicate that entrepreneurs' growth aspirations do not have a statistically significant effect on entrepreneurs taking action to apply for external finance at the 0,05-significance level. The lack of empirical evidence for a statistically significant relationship between growth aspirations and intention or action to apply for external finance is inconsistent with previous research, which showed that firms with high growth objectives are more likely to seek external finance (Cosh et al., 2009;Khalil et al., 2020). While this result could be due to the statistical model not having sufficient power to detect weak effects (Smith, 2020) or the timing difference that can occur when entrepreneurs desire to grow their businesses but delay taking action until they are ready (Fitzsimmons & Douglas, 2006), the lack of empirical support for a statistically significant association between growth aspirations and entrepreneurs taking action to apply for external finance is consistent with an indirect effect due to a mediating factor (MacKinnon et al., 2007;Warner, 2012). We propose that the perceived desirability of a finance option mediates the association between growth aspirations and entrepreneurs' intention to apply.
The model for goal-directed actions (Perugini & Bagozzi, 2001) further supports this proposition as it purports that the intention to perform a specific behaviour is mainly motivated by the desire to perform it and achieve a specific goal. Moreover, the model states that desire mediates the influence of attitude toward the behaviour, subjective norm and perceived behavioural control on the individual's intentions. In the context of entrepreneurs seeking external finance, the model for goal-directed actions suggests that the intention to apply for external finance is mainly motivated by the desirability of external finance to support business growth. Similarly, Fitzsimmons and Douglas (2011) demonstrated that perceptions of desirability could influence intention. The proposition that perceived desirability mediates the influence of growth aspirations on the entrepreneurs' intentions is supported by interview findings. Specifically, interview findings suggests that growth aspirations positively influence entrepreneurs' intention to apply for external finance by increasing the desirability of external finance. Figure 7 presents the proposed mediation model for testing in further research:

Limitations and further research
While this study sought to determine the effect of growth aspirations on entrepreneurs' intentions and actions when seeking external finance, causal conclusions cannot be confidently drawn from non-experimental studies (Warner, 2012). Moreover, the study does not account for growthrelated factors that change over time (Davidsson et al., 2005;Wright & Stigliani, 2013). Thus, this study cannot draw definitive causal conclusions.
Although we applied constructs from the entrepreneur event model (Shapero & Sokol, 1982) and the theory of planned behaviour (Ajzen, 1991), This study did not test the effect of entrepreneurs' perceptions of the desirability or feasibility of applying on entrepreneurs' intention to apply for external. In addition, we did not measure entrepreneurs' perceptions of their control over applying for external finance nor their propensity to act. Thus, while this study uses constructs from intention models to provide insight into how growth aspirations affect SMME financing decisions, it does not account for all factors that play a role in SMME financing decisions. Further research is needed to determine the manner and the extent to which perceptions of desirability, feasibility, behavioural control, or the entrepreneurs' propensity to act affect entrepreneurs' intention to apply for external finance.
Based on the interview findings, we proposed a mediation model that can be tested to determine if perceived desirability mediates the association between growth aspirations and entrepreneurs' intention to apply for external finance. However, hypotheses in the proposed model were not tested as part of this study. Further research is required to test the hypotheses in the proposed mediation model.
Lastly, further research is needed to replicate this study across different samples to validate that the results are not due to sampling error (Warner, 2012) and increase the likelihood of detecting weak/small effects in larger samples. This study used sales revenue to categorise businesses and select a sample comprising businesses classified as SMMEs (Department of Small Business Development, 2019). However, using a profitability index to select and compare businesses represented in the sample may be beneficial for validating this study's findings. We recommend that future research apply different inclusion criteria to validate the generalisability of these results across different samples.

Research implications
This study contributes to the literature by using the intention construct to provide insight into how entrepreneurs make and enact financing decisions. Researchers can extend this contribution by using the intention construct to explain why some entrepreneurs choose to apply while others do not (Freel et al., 2012;Kon & Storey, 2003;Statnik & Giang, 2019). Further, we contribute to theory building by identifying the role of growth aspirations in SMME financing decisions. A more precise understanding of the role of cognitive factors in SMME financing decisions can support policymakers and finance providers in guiding entrepreneurs who need additional funds to grow their businesses to make better use of the finance options available to them. Based on this study's findings, we recommend that finance providers encourage SMMEs to use available financing options by emphasising entrepreneurs' growth aspirations and demonstrating how different finance options can help them achieve their aspirations.

Conclusion
The literature suggests that growth aspirations positively influence SMME access to finance. However, a knowledge gap remained concerning the role of growth aspirations in SMME financing decisions. This study explored the role of entrepreneurs' growth aspirations in their decision to apply for external finance. In addition, the study investigated the effect of entrepreneurs' intention to apply for external finance on them taking action to apply, as well as the effect of growth aspirations on entrepreneurs' intentions and actions. While interview findings suggest that growth aspirations motivate entrepreneurs to make and act on the decision to apply for external finance, we found no empirical support for growth aspirations positively affecting intention to apply or entrepreneurs taking action to apply. Considering the interview finding, which suggested that growth aspirations increase the desirability of external finance, we propose that further research investigates a mediating effect wherein perceived desirability mediates the effect of growth aspirations on entrepreneurs' intention to apply for external finance. This study contributes to the literature by using the intention construct to provide insight into how entrepreneurs make and enact financing decisions. A more precise understanding of the role of growth aspirations in SMME financing decisions can support policymakers and finance providers in guiding entrepreneurs who need additional funds to grow their businesses to make better use of the finance options available to them.