Business Starters and Credit Rationing

By B. Blumberg, Wilko Letterie. 2008

117 citations recorded by the source corpus.

ABSTRACTThis paper investigates which business starters experience credit rationing by simultaneously analyzing which business founders apply for credit and which are refused. We argue that credit denial depends largely on the entrepreneurs’ commitment and signals regarding the repayment of the loan and the success chances of the proposed business. Our empirical analysis is based on a sample of 1140 potential business starters in the Dutch county South Limburg. Our findings show that commitments drive the credit application and approval, while the effects of signals are mixed. The findings also suggest that business founders have a pretty good idea regarding whether their applications will be honored or not.

Subfields: Accounting, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/7ffdb5a9c69486ae5bd82bf8b96da84c703b53fb

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Tensie Steijvers
2. Wim Voordeckers
3. Weixi Liu
4. Andrew Ledger
5. F. Polzin
6. Helen S. Toxopeus
7. A. Smit
8. E. Stam

In Management of Technology and Innovation

1. F. Polzin
2. Andrew Ledger
3. A. Smit
4. E. Stam
5. Weixi Liu
6. Marc Cowling
7. O. Fatoki
8. Wim Voordeckers

Citations in the corpus

• Collateral, relationship lending and family firms (2010, background): “Hence, the personal wealth of small business owners will play a key role in the credit acquisition process if personal commitments are a fundamental condition to obtain a loan ( Blumberg and Letterie 2008; Colombo and Grilli 2007; Avery et al. 1998).”
• Constraints to credit access by new SMEs in South Africa: A supply-side analysis (2011, result): “The findings are consistent the findings of Barbosa and Moraes (2004), Blumberg and Letterie (2008).”
• The Financial Literacy of Micro Entrepreneurs in South Africa (2014, background): “Blumberg and Letterie (2008) agree that the lack of venture capital funds makes many new SMEs dependent on bank loans, overdrafts and suppliers credit for early-stage financing.”
• Small business financing in the UK before and during the current financial crisis (2012, background): “These studies usually find a negative relationship between owner experience and difficulties in accessing external finance (e.g. Blumberg, 2007; Cassar, 2004; del-Palacio et al., 2010; Storey, 2004), which leads to our third hypotheses: H3 (demand): Women-led businesses are less likely to seek…”
• NO DEEP POCKETS: SOME STYLIZED EMPIRICAL RESULTS ON FIRMS' FINANCIAL CONSTRAINTS (2010, unknown): “Meanwhile, Blumberg and Letterie (2008), through an entrepreneur perspective in”
• The wisdom of the crowd in funding: information heterogeneity and social networks of crowdfunders (2018, background): “Third, we hypothesized that out-crowd funders investigate information about financial planning and risk more thoroughly to search for quality signals and commitment (Ahlers et al. 2015; Blumberg and Letterie 2007; Busenitz et al. 2005; Hornuf and Schwienbacher 2015).”