Small business is the dominant form of business enterprises in any economy whether developed or developing. This means that small business can play active role in the economic development of most countries. Despite this fact, they have not been accorded the respect and given the necessary financial and other support they deserve in the country, considering the fact that such giant industrial corporations like ford and general motors and many of today’s Nigeria giant enterprises like Onwuka inter-Biz, Odutola Group of companies, Ekene Dilichukwu, group of companies and Holdings startled small. It becomes imperative on the Government and the people of Nigeria to encourage on the Government and the people of Nigeria to encourage this subsection of the OPS ie. 

The organizations of the private sector. Essentially finance is one of the basic pivot around which the success and growth of any business organization. Thus every business enterprise whether big or small new or old needs capital to function effectively. This fact is even more critical for a small business enterprises which from the bedrock of any modern economy. It is in realization of the important role which small business play in the economic transformation of a nation that the structural adjustment programme (SAP) introduced by the Babangida administration structural adjustment programme (SAP) contains some incentives aimed at encouraging the business enterprise.

Furthermore, the need to develop small small industrial sector is being recognized by the developing countries the recognition of this need is derived from vital roles the small scale industrials establishment play in the economic development of these countries. Ultimately this vital emanates from the economic realities of the developing countries where low income per capital limits the saving capacity of the people without adequate savings, the developing countries of which Nigeria is one are faced with the problems of very low capitalization.

Nigeria like other developing countries in the world, has failed to adopted the use of small scale industries as one of the development  Polices, owing to the belief that it is a relatively slow process of industrialization and which was aimed at producing domestically consumer goods that were formally imported into the country

This policy of industrialization often requires continuous dependence on major supplies overseas for the provision of raw materials and spare parts needed for continuous provision in the industries. In order words goods used to be produced in the oversea countries under different environment and conditions were now being adopted (through sometimes not very successful) to domestic productions.

Also, the existence of small-scale industries in the economy of any nation has contributed to a large extent in the achievement of self reliance, with the high increase in the rate of unemployment and as many Nigerians are loosing their jobs as a result of retrenchment exercise in the country. People are now forced into finding a way of helping themselves. This more have also caused a very sharp increase in the number of small – scale business depending on their ability to raise capital.

It is a well know fact that large organizations do not have the same ability to achieve the equitable distribution of economic patronage and benefits which small – scale organizations can be achieve. This is why even the developed economics of the world like the united States Of America and United Kingdom have contributed / continued to encourage the small – scale industries have always been as a good out let for making new innovations and they offer good opportunities for a considerable number of persons in various and diverse geographical locations to its advantages (Nwankwo G.J 1984)  

In this chapter, the definition of small – scale industries sources of funds for small – scale industries, types of funds of small industries, basic financial management for small – scale industries relationship with lenders are examined.