Sources of Capital for Small Family-Owned Businesses

Abstract

Securing adequate capital is an ongoing challenge for many small family‐owned businesses. This article uses data from the 1993 National Survey of Small Business Finances to determine the extent to which small family‐owned firms use various types of credit products. Using logistic regression it also identifies variables that predict the likelihood of using credit. Findings reveal that size age and profitability of the firm were the most important predictors. Results also indicate that there were virtually no differences between family‐owned and nonfamily‐owned businesses in the usage of various credit products.

Capital Structure Determinants in Family Firms: An Empirical Analysis in Context of Crisis

“…Kumar et al, 2017;Rajan & Zingales, 1995) and we give particular attention to previous empirical research on capital structure determinants in family, unlisted, and small and medium firms (e.g. Ampenberger et al, 2013;Cassar & Holmes, 2003;Coleman & Carsky, 1999;Gonzá lez et al, 2013;Gottardo and Moisello, 2014;Lopez-Gracia & Sá nchez-Andùjar, 2007). Following this literature, we indentified the most commonly adopted determinants of medium family firms' capital structure as follows: firm size, firm age, profitability, asset structure, and current liquidity.…”

“…Specifically, existing empirical research on family firms' capital structure has highlighted that: a) both economic and non-economic reasons influence their financial decisions (Gallo et al, 2004;Koropp et al 2013); b) they are strongly dependent on self-financing and adopt conservative financial strategies (Romano et al, 2000); and c) they often forgo growth opportunities due to their reluctance in issuing new external resources to safeguard family control on the business (Croci et al, 2011;Gonzalez et al, 2013;Mahé rault, 2004;Romano et al, 2000;Wu et al, 2007). However, these empirical studies on family firms have given mixed results about the main determinants of their capital structure (Coleman & Carsky, 1999;Romano et al, 2000;Lopez-Garcia et al, 2007).…”

Influence of Internal Factors on the Use of Equity - and Mezzanine-Based Financing in Family Firms

“…Silent partnerships are often used in this respect to finance growth projects for which a debt financing is not suitable or available (Coleman and Carsky 1999;Cassar and Holmes 2003). Therefore, we hypothesize:…”

“…Despite their important role, current knowledge on family firms is still limited in this area. In particular, scholars have not yet investigated specific drivers of financing decisions in privately held family firms and have primarily focused on analyzing differences to non-family firms in their overall capital structure (Coleman and Carsky 1999;Gallo, Tàpies, and Cappuyns 2004;López-Gracia and Sánchez-Andújar 2007;Mishra and McConaughy 1999). The unique structure in family firms allows the family owners to influence the firm's strategy with their personal preferences or objectives.…”

How Do Private Family Firms Face the Crisis? Empirical Evidence from Belgium

“…Numerous researches have focused on the relationship between family ownership and performance. Nevertheless, even if family firms' outperformance seems to predominate in the literature (Charreaux, 1991;Coleman & Carsky, 1999;Anderson & Reeb, 2003;Andres, 2008;Bughin & Colot, 2008;Ahmad & Amran, 2010), neutral (Chrisman et al, 2004;Jaskiewics et al, 2006;Rutherford et al, 2008) and negative (Yurtoglu, 2000;Barth et al, 2005;Klein et al, 2005;Giovannini, 2010;Kowalewski et al, 2010) effects of family ownership on performance are also noticed.…”