Corpus ID: 14408261

The Benefits of Firm-Creditor Relationships: Evidence from small business data. *

  title={The Benefits of Firm-Creditor Relationships: Evidence from small business data. *},
  author={M. Petersen and R. Rajan},
  • M. Petersen, R. Rajan
  • Published 1993
  • Business
  • This paper empirically examines how close ties between a firm and its creditors affects the availability and the costs of funds to the firm. We analyze data collected in a survey of small firms by the Small Business Administration. We find that the primary benefit to a firm of building close ties with a creditor is that the availability of financing increas es. We find no analogous effect on the price of credit. Attempts by a firm to widen its circle of relationships by borrowing from multiple… CONTINUE READING
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