Funding self-employment -- the role of consumer credit

Christoph Kneiding and Alexander Kritikos

Applied Economics, 2013, vol. 45, issue 13, 1741-1749

Abstract: This article investigates whether self-employed households use consumer loans -- in particular, instalment loans and overdrafts -- to finance business activities. Controlling for financial and nonfinancial household variables, we show that self-employed households particularly use personal overdrafts significantly more often than employee households. When analysing the correlation between consumer loan take-ups and consumption of self-employed in comparison to employee households, we find first evidence that overdrafts are used by self-employed to finance their business as well. This indicates that intermingling constitutes a financing strategy when regular business loans might not be accessible.

Date: 2013
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Related works:
Working Paper: Funding Self-Employment: The Role of Consumer Credit (2011)
Working Paper: Funding Self-Employment: The Role of Consumer Credit (2011)
Working Paper: Funding Self-Employment – The Role of Consumer Credit (2008)
Working Paper: Funding Self-Employment - The Role of Consumer Credit (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:45:y:2013:i:13:p:1741-1749

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DOI: 10.1080/00036846.2011.637895

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