The Changing Landscape of Small-Firm Finance

William Dunkelberg () and Jonathan A. Scott
Additional contact information
William Dunkelberg: Temple University

Chapter Chapter 7 in Advances in Entrepreneurial Finance, 2011, pp 121-139 from Springer

Abstract: Abstract This chapter reflects on the changes in financing small firms during the past 25 years by reviewing the extant literature on how small businesses are financed at their inception, how continuing operations are financed, and how changing technologies have shaped capital markets for small firms. Our review of a unique small firm time series data set shows that many of the obstacles small firms faced in the early 1980s have mostly disappeared. New firm formations continue to depend on owner savings, friends, and family, while venture capital remains a microscopic proportion of total new firm financing in any given year. Once operating, small firms depend primarily on banks for operating support and capital investment, but the use of credit cards (business and personal) and nonbank sources (finance/leasing companies) is increasing in importance. We end with a discussion of two current issues in small firm finance: the cumulative impact of banking consolidation in the USA and the effect of the current financial crisis in the USA on small firm access to capital.

Keywords: Small Firm; Venture Capital; Credit Card; Large Bank; Small Business Administration (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (3)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4419-7527-0_7

Ordering information: This item can be ordered from
http://www.springer.com/9781441975270

DOI: 10.1007/978-1-4419-7527-0_7

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().