Small businesses are vulnerable and most time are at the discretion of their  owners for capital and critical decisions. Few small businesses actually exceeds the life span of five years with over 75% failure rate within the first years.

This is the main reason why most commercial institutions avoid any form of credit facilities to small business. There are many Reasons why small business fail in Nigeria. "Some of the challenges facing startup is unfavorable business environment, poor funding, poor managerial skills and lack of access to latest technology(FSS 2020 SME sector report 2007). Some of the reasons why small businesses fail in Nigeria are:

Lack of Financial Records
Most small business seldom keep detailed book of account. In fact, some of them rarely take stocks for months therefore, making it practically impossible to estimate profit and loss until it is too late. Book keeping is the bed rock of any business; inappropriate financial accounting system could ruin any business. Even the owners that keeps account most time doesn't make a clear distinction from book of account and owners personal expense. Some business owners also complained of inadequate capital to hire  professional accountant.

Inexperience
Young entrepreneurs most time lacks the necessary experience to manage small business. From my experience as a small and medium startup consultant, I observed that most small business failure can also be attributed to inexperience. Some of the businesses had been ruined even before commencing. Imagine a young entrepreneur spending 80% of his startup capital for rent even without having any idea of what to do in that office: to such persons, beautiful offices equal business success. Unfortunately, in business- the best way to learn is to start.

The central bank Governor Mr Godwin Emefiele during the seventh bankers committee meeting held in Lagos admitted the fact that banks are not doing enough in assisting small business in terms of credit facilities. He said " I must admit that the Nigeria banking sector has not played active role in supporting the SMEs and this is without reasons. We had issues in the past where people took loans and didn't pay". 99% of all the small businesses in Nigeria are micro enterprise(valued at less than five million Naira) and their main source of finance is personal savings(FG 2012 national survey on SMEs). Most businesses requires credit facilities to survive especially due to cash flow related challenges.

Most successful brands like GE depends on its global exchange of knowledge for survival. This is necessary to avoid repeated mistakes. Small business rarely takes note of what has really worked thereby, making same mistakes over and over again. 

In as much as it is easier for small business to adapt to change; few of them actually  are actually ready for change. Even now, many small business still depends on manual accounting techniques, payroll and customer relationship management software.