Search Results
Discussion Paper
The demand for trade credit: an investigation of motives for trade credit use by small businesses
Trade credit--credit extended by a seller who does not require immediate payment for delivery of a product--is an important source of funds for business customers. In 1987, such credit accounted for about 15 percent of the liabilities of nonfarm nonfinancial businesses in the United States, approximately the same percentage of liabilities as these firms' nonmortgage loans from banks. Trade credit apparently is especially important for small businesses: In the same year, it accounted for about 20 percent of small firms' liabilities. ; Businesses that choose to finance their purchases through ...
Working Paper
Does distance matter in banking?
Deregulation and technological change have reduced the transactions costs that led to the dominance of local financial service suppliers, leading some to question if distance still matters in banking. This debate has been particularly acute in small business banking, where transactions costs are believed to be particularly high. This paper provides a detailed review of the literature on distance in banking markets, highlighting the reasons why geographic proximity is believed to be important and examining the changes that may have affected its importance. Relying on new data from the 2003 ...
Working Paper
Examining the impact of credit access on small firm survivability
This paper examines the effects of credit availability on small firm survivability over the period 2004 to 2008 for non-publicly traded small enterprises. Using data from the 2003 Survey of Small Business Finances, we develop failure prediction models for a sample of small firms that were confirmed to have been in business as of December 2003, with particular attention to the impact of credit constraints. We find that credit constrained firms were significantly more likely to go out of business than non constrained firms. Moreover, credit constraint and credit access variables appear to be ...
Journal Article
Financial services used by small businesses: evidence from the 1998 survey of small business finances
Using newly available data from the 1998 Survey of Small Business Finances, this article offers preliminary findings regarding the characteristics of small businesses in the United States and their use of credit and other financial services. The main goals of the survey are to provide information on credit accessibility for small businesses, their use of financial services, and the sources of those services. The survey also provides a general-purpose database that can be used to study small business financing. Preliminary findings suggest that although the financial landscape has changed ...
Working Paper
Starting small and ending big -- the effect of monetary incentives on response rates in the 2003 Survey of Small Business Finances: an observational experiment
In 2003, the Survey of Small Business Finances (SSBF), conducted by the Federal Reserve Board, implemented the use of incentives to increase response rates. This study examines the effects of some of the characteristics of the implementation - such as level of effort, time in queue, and consecutively-increasing incentive amounts - on unit response. Our estimates suggest that as the number of days increase between the initial screener and main interview, the probability of completion decreases. Similarly, as the number of days increases between each consecutive incentive offer the probability ...