Menterjemahkan Toleransi Risiko Pemilik UMKM Melalui Keputusan Penggunaan Modal yang Mengandung Risiko Bisnis dan Risiko Keuangan.

This paper will briefly stress to translate risks in perspective of Small Medium Enterprises owners which be influenced situational or psychological reasons. The degree of risk tolerance could impact their financial decision that in turn should balance off against potential bankruptcy costs. This research conducts 351 respondents all over Surabaya and surrounding areas, respectively. Variables to translate degree of risk tolerance (character) are reflected from situational indicators, business risks which is reflected from variability of sales, demand, and earnings. Also, financial risk which is reflected the decision to use debt as a funding source. Moreover, for a more comprehensive analytical standpoint, structural equation model is used to analyses. Exploration the perception of risks is needed to get clear definition from SMEs. Matching the explanatory and exploratory variable can be implemented practically as long as they have difference degree of risk tolerance. These approaches can be used to reduce the weakness of statistical and perception approach. It is not only creating SMEs consciousness but also help to interpret and understand clearly the root of SMEs problem. Nevertheless, the potential errors and precautions of this model can be attained from the reliability of data that involves the understanding of SMEs owners of risks that can be distinguished from business scales, culture values and differences