This article investigates the effects of firm-level factors, including size, profitability, number of employees, business strategy and life-cycle, on finance seeking (debt and/or equity) by Australian small and medium-sized enterprises (SMEs). The study identifies firms seeking (or not seeking) finance and those who successfully (or unsuccessfully) acquired finance over a three-year period. Taking advantage of the longitudinal nature of the the data, the study finds that experience as a discouraged finance seeker significantly affects future behaviours. This has important policy implications: the observed demand for finance by SMEs and the capital rationing implied may understate the actual level as potential finance seekers anticipate rejection. The study also finds that SMEs become relatively more discouraged in seeking debt than equity finance.