Over the past two decades, small and medium-sized businesses have played an increasingly important role in economies around the world and continue to be a important tool for economies, especially for the growth of developing countries. The main challenge is the level of credit risk. A bank's objective is to maximize the risk-adjusted rate of return; Credit risk management is therefore essential for profitability and long-term lending. Loans (credit) are the most common credit risk that banks must manage (Basel Committee on Banking Supervision, 2000). In this article, credit risk will refer to the risk that banks are exposed to when lending money to businesses, in our case small and medium-sized businesses1.3. Sources of FinanceThe survival of every business depends on its ability to raise funds for its operations. Every business needs capital at least to: start, grow, prosper, expand, compete and survive. Where do businesses get the cash they need to finance their operations? Generally speaking, businesses generate cash through their operations. They also raise money by borrowing from lending institutions, often called debt financing, and by selling part of their stakes, known as equity financing. As economies continue to face credit problems, due to the financial crisis, small businesses, especially new, small and medium-sized enterprises. Larger companies find it even more difficult to find the financing they need to turn their ideas and concepts into viable businesses. Although small and medium-sized enterprises in developing countries provide a potential starting point for any sustainable industrialization contributing to long-term growth, production and increasing the number of companies growing and moving out of the small sect. .... middle of paper ...... Jaime F. Zender (2010). Debt capacity and testing of capital structure theories. Journal of Finance and Quantitative Analysis, 45, pp 1161-1187. doi:10.1017/S0022109010000499.H. DeAngelo and R. Masulis. “Optimal capital structure in terms of corporate and individual taxation. » Journal of Financial Economics 8 (March 1980), 3-29. CrossRef, Web of Science® Times Cited: 335Bryman, A (2006) Integrating quantitative and qualitative research: how does it happen? Qualitative Research, Vol.6 No. 1, pp. 97 – 113Sheridan Titman and Roberto Wessels (2012) The Determinants of Capital Structure Choice, The journal of finance, April 30, 2012, DOI: 10.1111/j.1540-6261.1988.tb02585. xSatish Raj Pathak (2011Fakher Buferna Kenbata Bangassa and Lynn Hodgkinson. (2005) Determinants of capital structure: evidence from Libya, University of Liverpool, research paper. No. 2005/08. ISSN 1744-0