The term SME is used to describe businesses that are too big to be just small businesses but which are too small to be regarded as big business. The term is usually used as a plural (i.e. SMEs).
The definition of SME will vary in different contexts and the term is often used without a clear definition. Definitions are usually based on the numbers of employees (from a few tens to a few hundreds) and turnover (usually up to a few tens of millions of pounds).
SMEs are more likely to be growth companies than larger companies are. However they are harder to invest in as they are rarely listed. Even those that are listed are very small companies by listed company standards and therefore have less liquid shares, are less likely to be well covered by analysts and tend to disclose less information to investors than larger companies.
The difficulty investors face in investing in SMEs is unfortunate as SMEs tend to be more innovative and generate more growth than bigger companies. The costs involved in accessing capital markets make this something that is unlikely to change despite the lack of access to capital faced by SMEs.