Small business financing in the UK before and during the current financial crisis

International Small Business Journal

Volumn 30, Issue 7, 2012, Pages 778-800

  Cowling, Marc ^a   Liu, Weixi ^a,b   Ledger, Andrew ^c  

^a UNIVERSITY OF EXETER BUSINESS SCHOOL   (United Kingdom)

^b RENMIN UNIVERSITY OF CHINA   (China)

^c Department for Business Innovation and Skills ^*  (United Kingdom)

Author keywords

access to finance; credit rationing; demand for finance; loan denial; recession

Indexed keywords

EID: 84869059699     PISSN: 02662426     EISSN: 17412870     Source Type: Journal    
DOI: 10.1177/0266242611435516     Document Type: Article

References (71)

1. Acharya VV,Viswanathan S.Leverage, moral hazard and liquidity.Journal of Finance. 2011;66 (1): 99-138.
2. Auerswald PE,Branscomb LM.Valleys of death and Darwinian seas: Financing the invention to innovation transition in the United States.Journal of Technology Transfer. 2003;28 (3-4): 227-239.
3. Bank Lending to Smaller Businesses. London: Bank of England; 1993:.
4. The Financing of Ethnic Minority Firms in the Uk: A Special Report. London: Bank of England; 1999:.
5. Bank of England (2011) Trends in lending, April. Available at: www.bankofengland.co.uk/publications/other/monetary/TrendsApril11.pdf (accessed 9 January 2012).
6. Bates T.Commercial bank financing of white and black owned small business start ups.Quarterly Review of Economics and Business. 1990;31 (1): 64-80.
7. Becchetti L,Castelli A,Hasan I.Investment-cash flow sensitivities, credit rationing and financing constraints in small and medium-sized firms.Small Business Economics. 2010;35 (4): 467-497.
8. Berger AN,Udell GF.Some evidence on the empirical significance of credit rationing.Journal of Political Economy. 1992;100 (5): 1047-1077.
9. Berger AN,Udell GF.The economics of small business finance: The roles of private equity and debt markets in the fiancial growth cycle.Journal of Banking & Finance. 1998;22 (6): 613-673.
10. Bester H,Hellwig MAgency Theory, Information and Incentives. Bamberg GSpremann K, ed. New York: Springer Verlag; 1989:135-166.
11. Biggs T,Raturi P,Srivastava M.Ethnic networks and access to credit: Evidence from the manufacturing sector in Kenya.Journal of Economic Behavior and Organization. 2002;49 (4): 473-486.
12. Binks MR,Ennew CT,Reed GV.Information asymmetries and the provision of finance to small firms.International Small Business Journal. 1992;11 (1): 35-46.
13. Blanchflower DG,Levine PB,Zimmerman DJ.Discrimination in the small-business credit market.Review of Economics and Statistics. 2003;85 (4): 930-943.
14. Blumberg BF.Business starters and credit rationing.Small Business Economics. 2007;30 (2): 187-200.
15. Bougheas S,Mizena P,Yalcinb C.Access to external finance: Theory and evidence on the impact of monetary policy and firm-specific characteristics.Journal of Banking and Finance. 2006;30 (1): 199-227.
16. Carter S,Shaw ELondon: Small Business Service; 2006:.
17. Cassar G.The financing of business start-ups.Journal of Business Venturing. 2004;19 (2): 261-283.
18. Cavalluzzo KS,Cavalluzzo LC.Market structure and discrimination: The case of small businesses.Journal of Money, Credit and Banking. 1998;30 (4): 771-792.
19. The Changing State of British Enterprise. Cambridge: Centre for Business Research; 1996:.
20. Chittenden F,Hall H,Hutchinson P.Small firm growth, access to capital markets and financial structure: Review of issues and empirical investigation.Small Business Economics. 1996;8 (1): 59-67.
21. Coleman S,Cohn R.Small firms' use of financial leverage: Evidence from the 1993 national survey of small business finances.Journal of Business and Entrepreneurship. 2000;12 (3): 81-98.
22. Cosh AD,Hughes AFinance and Small Firms. Hughes AStorey DJ, ed. London: Routledge; 1994:18-63.
23. Cowling M.The incidence of loan collateralisation in small business lending contracts: Evidence from the UK.Applied Economics Letters. 1999;6 (5): 291-293.
24. Cowling M.The role of loan guarantee schemes in alleviating credit rationing.Journal of Financial Stability. 2010;6 (1): 36-44.
25. Cowling M,Samuels J,Sugden RSmall Firms and the Clearing Banks: A Sterile, Uncommunicative and Unimaginative Relationship. London: Association of British Chambers of Commerc; 1991:.
26. Cressy R.Funding gaps: A symposium.The Economic Journal. 2002;112 (477): F1-F16.
27. De Meza D,Webb DC.Too much investment: A problem of asymmetric information.Quarterly Journal of Economics. 1987;102 (2): 281-292.
28. De Meza D,Webb DC.Does credit rationing imply insufficient lending?.Journal of Public Economics. 2000;78 (3): 215-234.
29. del-Palacio I,Zhang X,Sole F.The capital gap for small technology companies: Public venture capital to the rescue?.Small Business Economics. 2010.
30. Esperanca JP,Gama AP,Gulamhussen MA.Corporate debt policy of small firms: An empirical (re)examination.Journal of Small Business and Enterprise Development. 2003;10 (1): 62-80.
31. Fotopoulos G,Louri H.Location and survival of new entry.Small Business Economics. 2000;14 (4): 311-321.
32. Fraser S.Is there ethnic discrimination in the UK market for small business credit?.International Small Business Journal. 2009;27 (5): 583-607.
33. Goldfeld SMCommercial Bank Behaviour and Economic Activity. Amsterdam: North Holland; 1966:.
34. Grilli L.When the going gets tough, do the tough get going? The pre-entry work experience of founders and high-tech start-up survival during an industry crisis.International Small Business Journal. 2011;29 (6): 626-647.
35. Han L,Fraser S,Storey DJ.Are good or bad borrowers discouraged from applying for loans? Evidence from US small business credit markets.Journal of Banking & Finance. 2009;33 (2): 415-424.
36. Herbane B.Small business research: Time for a crisis-based view.International Small Business Journal. 2010;28 (1): 43-64.
37. Hillier B,Ibrahimo W.Asymmetric information and models of credit rationing.Bulletin of Economic Research. 1993;45 (4): 271-304.
38. Jaffee DMCredit Rationing and the Commercial Loan Market. New York: Wiley; 1971:.
39. Jaffee D,Stiglitz JEHandbook of Monetary Economics. Friedman BMHahn FH, ed. Amsterdam: Elsevier Science Publishers; 1990:838-888.
40. Jordan J,Lowe J,Taylor P.Strategy and financial policy in UK small firms.Journal of Business Finance and Accounting. 1998;25 (1): 1-27.
41. King SR.Monetary transmissions through bank loans or bank liabilities?.Journal of Money Credit and Banking. 1986;18 (3): 290-303.
42. Kon Y,Storey DJ.A theory of discouraged borrowers.Small Business Economics. 2003;21 (1): 37-49.
43. Levenson AR,Willard KL.Do firms get the financing they want? Measuring credit rationing experienced by small businesses in the U.S.Small Business Economics. 2000;14 (2): 83-94.
44. López-Gracia J,Sogorb-Mira F.Testing trade-off and pecking order theories financing SMEs.Small Business Economics. 2008;31 (2): 117-136.
45. Michaelas N,Chittenden F,Poutziouris P.Financial policy and capital structure choice in UK SMEs: Empirical evidence from company panel data.Small Business Economics. 1999;12 (2): 113-130.
46. Myers SC.Determinants of corporate borrowing.Journal of Financial Economics. 1977;5 (2): 147-175.
47. Myers SC.The capital structure puzzle.Journal of Finance. 1984;39 (3): 575-592.
48. Myers SC,Majluf NS.Corporate financing and investment decisions when firms have information that investors do not have.Journal of Financial Economics. 1984;13 (2): 187-221.
49. Nightingale P,Cowling M,Dannreuther C, et alFrom Funding Gaps to Thin Markets: The UK Support for Early Stage Venture Capital in the 21st Century. London: BVCA and NESTA; 2009:.
50. Psillaki M,Daskalakis N.Are the determinants of capital structure country or firm-specific?.Small Business Economics. 2008;33 (3): 319-333.
51. Raturi M,Swamy AV.Explaining ethnic differentials in credit market outcomes in Zimbabwe.Economic Development and Cultural Change. 1999;47 (3): 585-604.
52. Requena-Silvente F.The decision to enter and exit foreign markets: Evidence from U.K. SMEs.Small Business Economics. 2005;25 (3): 237-253.
53. Revest V,Sapio A.Financing technology-based small firms in Europe: What do we know?.Small Business Economics. 2010;35 (1): 1-27.
54. Riding ALFinancing Growth in Canada. Halpern PJN, ed. Calgary: University of Calgary Press; 1997:637-672.
55. Scherr FC,Hulburt HM.The debt maturity structure of small firms.Financial Management. 2001;30 (1): 85-111.
56. Scherr FC,Sugrue TF,Ward JB.Financing the small firm startup: Determinants for debt use.Journal of Small Business Finance. 1993;3 (1): 17-36.
57. Scholtens B.Analytical issues in external financing alternatives for SMEs.Small Business Economics. 1999;12 (2): 137-148.
58. Sena V,Scott J,Roper SG.Borrowing patterns and self-employment: some evidence for England.Small Business Economics. 2010.
59. Slovin MB,Slushka ME.A model of the commercial loan rate.Journal of Finance. 1983;38 (4): 1583-1596.
60. Smallbone D,Ram M,Deakins D, et al.Access to finance by ethnic minority businesses in the UK.International Small Business Journal. 2003;21 (3): 291-314.
61. Sofianos G,Wachtel P,Melnik A.Loan commitments and monetary policy.Journal of Banking and Finance. 1990;14 (4): 677-689.
62. Stiglitz JE,Weiss A.Credit rationing in markets with imperfect information.American Economic Review. 1981;71 (3): 393-410.
63. Storey DJSME Centre. Warwick: Warwick Business School; 1997:.
64. Storey DJ.Racial and gender discrimination in the micro firms credit market? Evidence from Trinidad and Tobago.Small Business Economics. 2004;23 (5): 401-422.
65. Storey DJ,Strange AUnderstanding the Small Business Sector. London: Routledge; 1994:.
66. Titman S,Wessels R.The determinants of capital structure choice.Journal of Finance. 1988;43 (1): 1-19.
67. UK SME Statistical Bulletin (2011) Business population estimates for the UK and regions 12011, October. Available at: www.bis.gov.uk (accessed 9 January 2012).
68. Van Caneghem T,Van Campenhout G.Quantity and quality of information and SME financial structure.Small Business Economics. 2010 2010;:.
69. Van de Ven WPMM,Van Pragg BMS.The demand for deductibles in private health insurance: A probit model with sample selection.Journal of Econometrics. 1981;17 (2): 229-252.
70. Wald JK.How firm characteristics affect capital structure: An international comparison.Journal of Financial Research. 1999;22 (2): 161-187.
71. Westhead P,Storey DJ.Financial constraints on the growth of high-technology small firms in the United Kingdom.Applied Financial Economics. 1997;7 (2): 197-201.