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| Author: | Hanley, A. Girma, S. |
| Title: | New ventures and their credit terms |
| Journal: | Small business economics
2006 : MAY, VOL. 26:4, p. 351-364 |
| Index terms: | new enterprise entrepreneurship venture capital information loans credit banks United Kingdom |
| Freeterms: | interest margins |
| Language: | eng |
| Abstract: | Based on U.K. bank data for 466 new venture loan applications, this paper examines the determinants of interest margin, the sanctioning decision and the amount borrowed when these factors are considered simultaneously. Collateral levels greatly influence the size of credits to new ventures. Consistent with the Diversionary Models of debt, in RAND Journal of Economics vol. 25, p. 334347, firms with larger credits enjoy discounted interest margins even with controlled firm size. |
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