The recent financial crisis not only affected the financial sector but also the whole economy. The crisis caused many countries to experience a major decline in economic output and the usual consequences associated with a recession. The Dutch economy has also not been fully immune from the crisis’s adverse effects. Thus, policy makers, regulators and practitioners alike are very much curious and concerned with the effect of the crisis on small and medium sized enterprises (SMEs), given the fact that they are the influential growth driver of the real economy. This thesis will certainly crunch their thrust to a great extent as it investigates the effect of the financial crisis on the SMEs in the Netherlands. It focuses on three areas, namely; investment, trade credit, and cash holdings. Following the standard European Commission definition of identifying small- and medium-sized enterprises, a unique dataset of private firms in the Netherlands covering a long time-period (2003-2012) is constructed. This relative large dataset with ten years of data enables to make a statistically reliable comparison of the crisis period relative to the pre-crisis period. The research project regarding investment reports that, Dutch SMEs have significantly reduced their capital investment during the financial crisis. The investment has declined on average 1.2%-1.4% during the financial crisis compared to the pre-crisis period. The findings also reveal that, the internal finance and the external finance, both significantly determined investment and their incremental influence did not change during the financial crisis. While investigating the trade credit behavior of Dutch SMEs, the thesis reports that, trade receivables and trade payables have decreased on average 2.5% and 2.2% respectively during the financial crisis compared to the pre-crisis period. Furthermore, it also finds that, trade payables of SMEs played a complementary role with bank finance (i.e. SMEs who received more bank finance also received more trade credit). Moreover, examining whether SMEs acted as pseudo financial intermediaries by redistributing part of their obtained bank credit, the results confirm that during the financial crisis SMEs do pass up part of their obtained bank finance to their customers via the trade credit channel (i.e. SMEs act as financial intermediaries by providing trade credit). Finally, the study regarding the cash holdings reports that, cash holdings of SMEs have increased significantly on average 1.2% to 2.2% during the financial crisis compared to the pre-crisis period. The findings further confirms that, SMEs inclined to hold more cash even when they had more cash flow and bank finance. Holding more cash by SMEs during the crisis indicates that these firms postponed their investment and contributing less to the economic recovery. This findings thus further confirm the corporate precautionary savings motive, which is the byproduct of the adverse effect of the financial crisis. The overall findings of the three research projects indicate that the SMEs in the Netherlands suffered from the negative influence of the financial crisis. The policy implications of this thesis are important in the context of the financial crisis and economic recovery. Any policy that restricts the profitability, cash reserves, access to bank credit or any other sources of finance for SMEs would entail adverse supply effects. Given the importance of SMEs (i.e. significant share in innovation, employment and national output compared to large firms), policy makers and regulators should pay attention to these small players.