Firms’ Expectations on Access to Finance at the Early Stages of the Covid-19 Pandemic

Ferrando, Annalisa; Ganoulis, Ioannis

doi:10.2139/ssrn.3656265

Cited by 21 publications

(14 citation statements)

References 14 publications

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“…The number of studies in the newly emerging literature examining how firms' financing expectations, preferences, and conditions changed after the COVID-19 pandemic has rapidly increased. Using firm-level survey data from the end of February to early April 2020 in the euro area, Ferrando and Ganoulis (2020) show that, although the expectations of both SMEs and large firms regarding bank loans and credit lines worsened during the pandemic, micro and small firms, in particular, had more positive conditional expectations about trade credits. Song et al ( 2021) use loan-level data from China to investigate the effect of the pandemic on bank loans for small firms.…”

Section: Theoretical Background Literature Review and Hypothesesmentioning

confidence: 98%

“…Overall, this paper contributes to two strands of literature. Some studies analyze the difficulties faced by firms, especially SMEs, during the COVID-19 pandemic, using survey-based methods (see Bartik et al, 2020;Cowling et al, 2020;Ferrando & Ganoulis, 2020;Guerrero-Amezaga et al, 2022). Thus, our paper first adds to this recently emerging empirical literature by addressing the financing channels of firms of different sizes.…”

Section: Introductionmentioning

confidence: 99%

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Firm Size and Financing Behavior during the COVID-19 Pandemic: Evidence from SMEs in Istanbul

et al. 2023

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Section: Theoretical Background Literature Review and Hypothesesmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Firm Size and Financing Behavior during the COVID-19 Pandemic: Evidence from SMEs in Istanbul

et al. 2023

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“…Their study acknowledged that notwithstanding some sound 'track records' and 'personal resource endowments,' ethnic minority entrepreneurs continue to face financial marginalization. While cash flow problems were the main reason for trying to get financial assistance (Cowling et al, 2021), the emergent of COVID-19 have remarkably deteriorated enterprises expectations of access to finance through credit lines, bank loans, and trade credits (Cowling et al, 2020;Ferrando, 2020).…”

Section: Access To Financementioning

confidence: 99%

“…, 2021), the emergent of COVID-19 have remarkably deteriorated enterprises expectations of access to finance through credit lines, bank loans and trade credits (Cowling et al. , 2020; Ferrando, 2020).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Survival strategies adopted by microbusinesses during COVID-19: an exploration of ethnic minority restaurants in northern Finland

Arslan

Kamara

Zahoor

et al. 2022

IJEBR

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PurposeThis paper explores the survival strategies and coping mechanisms of ethnic minority entrepreneurs operating in the hospitality sector in northern Finland during the ongoing COVID-19 pandemic.Design/methodology/approachThe paper utilizes qualitative research approach based on six exploratory case studies. The in-depth interviews in two phases were conducted with owners/mangers of ethnic minority entrepreneurial restaurants.FindingsThe findings reveal that all studied case firms undertook quick adjustments in response to the COVID-19 pandemic. For example, staff working hours were reduced through mutual consultation, and readjustments to the supply chain were made so that critical ingredients remain available despite the forced lockdown and supply chain bottlenecks. However, the readjustment of the supply chain was not visible in all case firms. Some of the owner-managers who were interviewed decided to keep doing business with the ethnic minority suppliers, despite some transportation problems due to lockdowns, especially in the early phases of COVID-19. Findings also suggest that the support grants announced by the state appeared not to be particularly useful for these restaurants due to restrictive eligibility criteria that many microbusinesses potentially fail to meet. Finally, the sample microbusinesses (restaurants) entrepreneurs recognize the importance of home delivery for their business survival, although they were critical of online food delivery service providers (apps) due to their high charges. Some of the case restaurants gave customers incentives for directly ordering from them, as an alternative strategy.Originality/valueThis paper is one of the first studies to specifically highlight the peculiarities of ethnic minority entrepreneurship and survival dynamics in northern Finland, where running the restaurant operations, including ensuring the supply chain management, is more complex than in the case of ethnic minority restaurants in more well-connected European countries and cities with an established history of immigrant businesses. This study is also novel in terms of specifying the strategies adopted by ethnic minority businesses in adjusting to the disruptions caused by the COVID-19 pandemic and surviving through it. At the same time, it has shown limitations and some problems associated with accessing state support announced for the hospitality industry in response to COVID-19. Finally, it offers a new angle by explicitly highlighting the power dynamics between restaurants and food ordering platforms (apps) and the potential alternatives in this specific context.

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“…Much less has been said about the future viability of firms. Bartik et al (2020), Bankowska et al (2020 and Ferrando and Ganoulis (2020) provide early survey evidence on the effect of the pandemic on businesses in Europe and the US. Granja et al (2020), when analysing the Payroll Protection Program (PPP) and Pandemic Unemployment Insurance for small business profitability, conclude that bank lending channel in terms of distributing loans play an important role in the effectiveness of the policy support.…”

Section: Introductionmentioning

confidence: 99%

SME viability in the COVID-19 recovery

2023

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Using survey data from a representative sample of Irish Small and Medium Enterprises (SMEs), we study how firms are likely to recover under macroeconomic forecasts of the pandemic recovery. The rate of financial distress among firms is expected to fall under baseline forecasts from a peak of 12 per cent in 2020 to 7 per cent by 2024. We find that those firms that struggle to recover by the end of our scenario window were mostly unprofitable or distressed prior to the pandemic. Beyond our baseline case, we further model three alternative recovery scenarios to study the effect of fiscal support tapering, a partial recovery due to structural change in sectoral demand, and a financing gap driven by credit risk retrenchment by lenders. Our findings highlight the continued importance of "bridging" liquidity finance provision to ensure the longterm solvency of viable firms. 1 We thank Sean Fitzpatrick, Sarah Holton, Vasileios Madouros, Paul Reddan, and seminar participants for helpful comments. The views in this paper are our own and do not necessarily represent the views of the Central Bank of Ireland.

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Firms’ Expectations on Access to Finance at the Early Stages of the Covid-19 Pandemic

Cited by 21 publications

References 14 publications

Firm Size and Financing Behavior during the COVID-19 Pandemic: Evidence from SMEs in Istanbul

Firm Size and Financing Behavior during the COVID-19 Pandemic: Evidence from SMEs in Istanbul

Survival strategies adopted by microbusinesses during COVID-19: an exploration of ethnic minority restaurants in northern Finland

SME viability in the COVID-19 recovery

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