A Survey of Leasing in Small Firms

Chenchuramaiah T. Bathala and Tarun K. Mukherjee
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Chenchuramaiah T. Bathala: North Dakota State University
Tarun K. Mukherjee: University of New Orleans

Journal of Entrepreneurial Finance, 1995, vol. 4, issue 2, 113-27

Abstract: This paper reports survey results regarding leasing practices of small firms. Small firms that lease are more likely to be relatively large manufacturing firms which exhibit higher debt ratios and higher sales growth. The survey responses as well as empirical analyses of pertinent data reveal that the relationship between debt and leasing is complementary. Unlike their larger counterparts, small firms seldom use text-book recommended lease-borrow decision models. Also, unlike large firms, small firms are more likely to offer “dubious” reasons, such as off-balance sheet accounting and 100 percent financing, as advantages of leasing.

Keywords: Small Firms; Leasing; Small Business (search for similar items in EconPapers)
JEL-codes: G32 L25 (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (1)

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