Access to Long-Term Loans and Financial Performance of an SME in Sheema District, Uganda: Evidence from Numa Feeds Limited

This study examined the relationship between access to long-term loans and the financial performance of Numa Feeds Limited in Sheema District, Uganda. A quantitative cross-sectional research design was adopted, targeting management and staff of Numa Feeds Limited. Data were collected using a structured questionnaire and analysed using descriptive statistics and Pearson correlation analysis. The findings indicated generally favourable perceptions of long-term financing, particularly regarding loan amounts, interest-rate affordability, loan duration, collateral availability and repayment arrangements. The study established a moderate positive and statistically significant relationship between long-term loans and financial performance (r = .501, p = .001). Regression results further indicated that long-term loans explained 25.1% of the variation in financial performance. The study concludes that access to appropriately structured long-term finance is an important factor associated with SME financial performance, although performance is also influenced by other financial, managerial and operational factors. The study recommends that SMEs strengthen debt-management practices and negotiate affordable loan terms and repayment schedules aligned with business cash flows.