Small-and-medium enterprises (SMEs) should embrace private equity to ease the financing problems they face today, according to a survey Ernst & Young.The "Getting down to business” survey released recently, says SMEs’ growth is greatly constrained by lack of capital from banks and public markets, as well as high rates on bank loans. A proven instrument for addressing these shortcomings is private equity, it indicated. "It is, therefore, important that we consider private equity because it is an important alternative source of funding that helps facilitate the growth of any company or sector,” Ernst & Young’s Sandile Hlophe noted in the report. Hlophe advised SME operators to always design unique growth plans to attract private equity funds to expand their businesses.Private equity consists of investors and funds, which make investments directly into private companies. Capital for private equity is raised from retail and institutional investors.Commenting on the report, Allan Gichuhi, the Rwanda Ernst & Young partner, said private equity plays a big role in supporting regional development goals of the private sector. Gichuhi noted that if private equity firms worked in partnership with management teams and entrepreneurs, there would be a ‘cross-fertilisation’ of ideas and the transfer of skills and knowledge from private equity teams to the companies they support.He said this helps leverage the big networks of equity firms and boost the skills and expertise of the company. It also helps to identify acquisition targets and introduce potential clients while also identifying future partners for the business, he added.  According to the report, private equity firms have invested nearly $12b in Africa over the last five years, raising $10b. "This demonstrates how private equity firms add value over and above the provision of capital in supporting the operational and strategic growth of businesses,” the report says. Stephen Sang, a senior manager on assurance and advisory business services at Ernst & Young, said flexibility and adaptability were essential for companies to gain from private equity.