Why Do Firms Strategically Delay Payments of Corporate Loans?

Ahmet Deryol

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: Firms may prefer to delay some loan payments while continuing to service others because of lender and loan characteristics. I explore the impact of bank-level and bank–firm-level indicators on the strategic delay behaviors of nonfinancial corporations. Three factors play a key role in their strategic delay decisions. First, strategic delay events occur more when the likelihood of obtaining additional and high-quality funding in the future is limited. Second, firms are more reluctant to delay payments of loans strategically that are easier to repay. Third, firms are more likely to delay payments when the anticipated cost of delaying is low. Importantly, as the financial literacy levels of firm owners increase, the likelihood of a strategic delay event decreases.

Keywords: Strategic delay; Firm behavior; Credit risk (search for similar items in EconPapers)
JEL-codes: G21 G32 G33 G53 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:2608

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