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Funding Self-Employment: The Role of Consumer Credit

Christoph Kneiding and Alexander Kritikos

No 1179, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper investigates whether self-employed households use consumer loans - in particular instalment loans and overdrafts - to finance business activities. Controlling for financial and non-financial household variables we show that self-employed households particularly use personal overdrafts significantly more often than employee households. When analyzing the correlation between consumer loan takeups 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.

Keywords: Small Business Finance; Consumer Credit; Financial Intermingling (search for similar items in EconPapers)
JEL-codes: D12 D14 G32 (search for similar items in EconPapers)
Pages: 23 p.
Date: 2011
New Economics Papers: this item is included in nep-cfn, nep-ent and nep-iue
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https://www.diw.de/documents/publikationen/73/diw_01.c.390690.de/dp1179.pdf (application/pdf)

Related works:
Journal Article: Funding self-employment -- the role of consumer credit (2013) Downloads
Working Paper: Funding Self-Employment: The Role of Consumer Credit (2011) Downloads
Working Paper: Funding Self-Employment – The Role of Consumer Credit (2008) Downloads
Working Paper: Funding Self-Employment - The Role of Consumer Credit (2007) Downloads
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