Resumo

Small businesses have specific characteristics that can turn into difficulties for managers. According to Stroeher and Freitas (2008), among the main difficulties are access to credit, lack of skilled labor, excess burden of taxation and lack of understanding of financial, accounting and management practices. Such scenario favors an informal environment and encourages the creation of alternative means to the classic financing coming from financial institutions.

The objective of this paper is to show, in light of the approach of financial theories, the characteristics of family financing in micro and small enterprises. For this purpose, interviews were conducted with entrepreneurs, family members of the interviewed entrepreneurs and bankers.

This study aims to identify the characteristics of the sources of family financing in micro and small enterprises, demonstrating the influence of this source in the management, as well as comparing it with evidences found by literature regarding the Organizational Life Cycle Theory and the Pecking Order Theory.

13 interviews were conducted with micro and small entrepreneurs in the cluster of garment located in the of Pernambuco, Brazil. Entrepreneurs, family members and bankers were interviewed to enable the triangulation of information with similar questions for each group.

Two main aspects were observed: (1) family members tend to lend resources (usually low values) without demands or interest, and (2) the entrepreneurs feel compelled to resort to banks when relatives borrow with interest. Berger and Udell (1998) postulate that familiar sources can be characterized as internal debit or equity resources. In this research, however, family members do not even require participation in the company's decisions, and interviewees expressed that although family members help, it is important not to mix them with business.

The strong characteristic of tradition and the cultural family influence in the business can help in understanding why charges and interest rates are not applied when borrowing money. However, it should be noted that such behavior would lead to a characteristic of equity of such financing in companies, which was not found in this study. In order to verify if this characteristic was predominant, the entrepreneurs and their relatives were asked if they followed up the management, accountability or any type of requirement that led to the characteristic of equity.

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