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The latent demand for bank debt: characterizing discouraged borrowers

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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The latent demand for bank debt: characterizing discouraged borrowers. / Freel, Mark; Carter, Sara; Tagg, Stephen et al.
In: Small Business Economics, Vol. 38, No. 4, 05.2012, p. 399-418.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Freel, M, Carter, S, Tagg, S & Mason, C 2012, 'The latent demand for bank debt: characterizing discouraged borrowers', Small Business Economics, vol. 38, no. 4, pp. 399-418. https://doi.org/10.1007/s11187-010-9283-6

APA

Freel, M., Carter, S., Tagg, S., & Mason, C. (2012). The latent demand for bank debt: characterizing discouraged borrowers. Small Business Economics, 38(4), 399-418. https://doi.org/10.1007/s11187-010-9283-6

Vancouver

Freel M, Carter S, Tagg S, Mason C. The latent demand for bank debt: characterizing discouraged borrowers. Small Business Economics. 2012 May;38(4):399-418. doi: 10.1007/s11187-010-9283-6

Author

Freel, Mark ; Carter, Sara ; Tagg, Stephen et al. / The latent demand for bank debt : characterizing discouraged borrowers. In: Small Business Economics. 2012 ; Vol. 38, No. 4. pp. 399-418.

Bibtex

@article{15aa0e62bf204a8f9cd1620a58a988f4,
title = "The latent demand for bank debt: characterizing discouraged borrowers",
abstract = "Concerns that small firms encounter credit constraints are well entrenched in the literature, despite widespread empirical evidence that a relatively small proportion of small firms have their loan applications rejected. However, many firms may be discouraged from applying for fear of rejection. These businesses are the focus of this paper. Based on responses to a large-scale postal survey of UK small and medium-sized enterprises (SMEs), we find that twice as many businesses were discouraged from applying for a bank loan than had their loan request denied. More particularly, we observe a number of distinguishing characteristics of “discouraged borrowers” (relative to applicants). These include: strategy, sector, prior entrepreneurial experience and banking relationships. The implications of our findings for policy and future research are briefly discussed.",
keywords = "Small firms , Funding gap, Banks, Loan finance, Loan denial, Discouragement",
author = "Mark Freel and Sara Carter and Stephen Tagg and Colin Mason",
year = "2012",
month = may,
doi = "10.1007/s11187-010-9283-6",
language = "English",
volume = "38",
pages = "399--418",
journal = "Small Business Economics",
issn = "0921-898X",
publisher = "Springer New York LLC",
number = "4",

}

RIS

TY - JOUR

T1 - The latent demand for bank debt

T2 - characterizing discouraged borrowers

AU - Freel, Mark

AU - Carter, Sara

AU - Tagg, Stephen

AU - Mason, Colin

PY - 2012/5

Y1 - 2012/5

N2 - Concerns that small firms encounter credit constraints are well entrenched in the literature, despite widespread empirical evidence that a relatively small proportion of small firms have their loan applications rejected. However, many firms may be discouraged from applying for fear of rejection. These businesses are the focus of this paper. Based on responses to a large-scale postal survey of UK small and medium-sized enterprises (SMEs), we find that twice as many businesses were discouraged from applying for a bank loan than had their loan request denied. More particularly, we observe a number of distinguishing characteristics of “discouraged borrowers” (relative to applicants). These include: strategy, sector, prior entrepreneurial experience and banking relationships. The implications of our findings for policy and future research are briefly discussed.

AB - Concerns that small firms encounter credit constraints are well entrenched in the literature, despite widespread empirical evidence that a relatively small proportion of small firms have their loan applications rejected. However, many firms may be discouraged from applying for fear of rejection. These businesses are the focus of this paper. Based on responses to a large-scale postal survey of UK small and medium-sized enterprises (SMEs), we find that twice as many businesses were discouraged from applying for a bank loan than had their loan request denied. More particularly, we observe a number of distinguishing characteristics of “discouraged borrowers” (relative to applicants). These include: strategy, sector, prior entrepreneurial experience and banking relationships. The implications of our findings for policy and future research are briefly discussed.

KW - Small firms

KW - Funding gap

KW - Banks

KW - Loan finance

KW - Loan denial

KW - Discouragement

U2 - 10.1007/s11187-010-9283-6

DO - 10.1007/s11187-010-9283-6

M3 - Journal article

VL - 38

SP - 399

EP - 418

JO - Small Business Economics

JF - Small Business Economics

SN - 0921-898X

IS - 4

ER -