Small Firm Lending Contracts: Do Banks Differentiate between Firms?

Marc Cowling and Roger Sugden
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Roger Sugden: University of Birmingham

Journal of Entrepreneurial Finance, 1995, vol. 4, issue 1, 87-98

Abstract: This paper examines the role of interest rates and securities within the context of the small firm - bank lending relationship and questions whether banks alter their lending conditions on the basis of specific firm characteristics and the nature of the borrowing undertaken. The results suggest that the imposition of full collateralization reduces the role of interest rates considerably, although there is evidence of banks exercising their market power in more costly lending of the smallest of firms.

Keywords: Small Firms; Small Business; Lending Contracts (search for similar items in EconPapers)
JEL-codes: G21 G32 L25 (search for similar items in EconPapers)
Date: 1995
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:pep:journl:v:4:y:1995:i:1:p:87-98

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