Social and Behavioral Sciences Commons^™

Small Business Debt Financing: The Effect Of Lender Structural Complexity., Jaume Franquesa, David Vera

Business Administration Faculty Scholarship

Small- and medium-sized enterprises (SMEs) depend on a large measure on commercial banks for external capital, and US SMEs are increasingly experiencing bank credit constraints and resorting to costly alternatives. The purpose of this paper is to investigate the impact of lender organizational complexity on SME financing shortfalls. In particular, it examines the credit shortage effects associated with the SME's reliance on bank holding company (BHC) owned, as opposed to independent, lenders.