Business advice and lending in small firms

Anoosheh Rostamkalaei and Mark Freel

Environment and Planning C, 2017, vol. 35, issue 3, 537-555

Abstract: The literature on lending to small firms has primarily focused on the mechanisms and methods used to evaluate entrepreneurs and businesses and on the types of firms that are more likely to experience unfavourable application outcomes. That is, the focus of most empirical research is on supply-side decisions. The current research attempts to shed some light on demand-side considerations. Drawing upon data collected as the UK SME Finance Monitor (2011–2014), we identify links between entrepreneurs' diligence, business risk and finance-related advice-seeking prior to initiating loan and overdraft applications. The results show evidence of the usefulness of advice in ameliorating, both structural and strategic, business risk and improving the prospects of successful debt applications to banks.

Keywords: Small and medium sized firms; business advice; business risk; effect of advice (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:35:y:2017:i:3:p:537-555

DOI: 10.1177/0263774X16665620

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