Asset-Backed vs. Competence-Driven Leverage: The Next Entrepreneural Finance Challenge - Evidences from the Italian Experience in Small Business Finance

2011 ◽  
Author(s):  
Guido Max Mantovani
Keyword(s):  
Small Business ◽  
Small Business Finance ◽  
Italian Experience

scholarly journals Determinants of Small Business Owner Loan

2019 ◽  
Vol 3 (2) ◽  
pp. 8
Author(s):  
Jiameng Ma
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
The United States ◽  
Agency Cost ◽  
Cost Of Debt ◽  
Business Owner ◽  
Small Business Owner ◽  
Small Business Finance ◽  
United States Economy ◽  
Agency Cost Of Debt

Shareholders and debtholders have diverging objectives. Shareholders are residual claimants whereas debtholders are fxed claimants to frm’s assets. In leveraged frms, shareholders may increase the value of their claims at the expense of debtholders. The presence of shareholders being debtholders is a smart interest alignment, providing a solution to shareholder-debtholder conflicts. This paper focuses on small businesses, which play an important role in the United States economy but are generally neglected by academia. Utilizing National Survey of Small Business Finance (NSSBF) data, this paper shows that frms with higher agency cost of debt are more likely to issue owner loan. The incidence of small business owner loan is positively associated with external lending diffculty, low shareholder agency cost and frm valuation diffculty.

Effect of Corporate Social Responsibility on Pricing of Small Business Loans

2021 ◽  
pp. 1226-1249
Author(s):  
Markku Vieru ◽  
Janne Peltoniemi
Keyword(s):  
Corporate Social Responsibility ◽  
Small Business ◽  
Social Responsibility ◽  
Small Firms ◽  
Management Practices ◽  
Bank Lending ◽  
Loan Pricing ◽  
Small Business Finance ◽  
Small Business Loans ◽  
Corporate Social

This study analyzes corporate social responsibility (CSR) issues in small business finance in Finland, especially within relationship banking. The study combines credit-file data obtained from a large local Finnish bank with a CSR questionnaire conducted with the bank's business loan managers. The credit-file data contain specific details of CSR characteristics, as well as relationship-, collateral-, firm-, and loan-specific characteristics. CSR, typically considered as a non-financial item, contains value-relevant financial information which affects the loan pricing level. The results show that both overinvestment in CSR and the value created by CSR are valid but connected to different CSR characteristics. Overinvestment is associated with the environment and value creation with diversity and employees. The results contribute to the understanding of the characteristics of CSR in the context of small business bank lending, as well as more generally to important implications for small firms, banks, and management practices.

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