The happy story of small business financing

The Relationship between the Risk of a Change of the Interest Rate and the Age of Entrepreneurs among Slovak SMEs

“…Our findings are conformal with the results of the majority of studies that prove significant relations between these two factors, e.g. surveys of Bottazzi et al (2014) and Vos et al (2007). They bring evidence that younger firms face the financial and credit risk more intensively than older and larger firms.…”

“…Bottazzi et al (2014) and Vos et al (2007) bring the evidence that smaller and younger firms have more limited possibilities of external financing than larger and older firms. Vos et al (2007) state that there are coherences among the age and the level of education of entrepreneur and the interest rate of drawing finance from external funds. According to their study, younger and less educated entrepreneurs are more likely to use external finance for their business growth, while older and more educated entrepreneurs are less likely to use external financing.…”

“…Their small size is according to such authors as Steinerowska-Streb and Steiner (2014), Irwin and Scott (2010), Mercieca et al (2009), Belás (2015b), Dong and Men (2014), Cheng, Tang and Shi (2012) often a reason why they more intensively face the financial risk and also the credit risk. Also Vos et al (2007), Bottazzi et al (2014), Lazányi (2014), Oliveira and Fortunato (2006), Dong and Men (2014), Hernández-Cánovas and Martínez-Solano (2010), Bougheas et al (2006), Pickernell et al (2011), Riding et al (2012) declare that the credit risk is higher in the group of younger entrepreneurs. The aim of this paper is to prove by the statistical method that the age of entrepreneurs (SMEs) should be considered as a relevant factor with the significant impact on the intense of credit risk in general, and its part -the risk of a change of the interest rate -in particular in Slovakia.…”

Demand for debt and equity before and after the financial crisis

“…Reliance on bank finance causes SMEs to be particularly vulnerable if there is an abrupt and extensive disruption to the world financial system resulting in a credit crunch (Udell, 2009). Exposure to adverse effects of a credit crunch is intensified as small firms generally do not have diversified sources of external funding (Vos et al, 2007). It is further increased if a credit crunch is preceded by a period of expanded credit, during which firms may become reliant on debt finance (Hughes, 1997), and consequently accumulate large debt to assets ratios.…”

The role of bank credits in investment financing of the small and medium-sized enterprise sector in Poland

“…Every tenth micro and medium-sized company and every fourth of small businesses applied for crediting. 2008 38 13 16 1 50 2009 38 22 15 7 52 2010 32 22 14 2 50 2011 33 16 17 13 50 2012 36 23 18 5 63 Medium 2008 36 20 24 7 66 2009 45 18 5 5 67 2010 46 8 23 3 62 2011 39 17 20 2 50 2012 43 26 26 11 69 Source: author's own compilation based on: [14,15,16,17,18] Every second business credit applicant was awarded the crediting it sought. The most, that is, as many as 78% medium-sized enterprises were successful applicants, compared with 62% of small companies and 35% of micro-enterprises.…”