• DOI:10.1111/J.1540-6261.1994.TB04418.X
Corpus ID: 58938238

The Benefits of Lending Relationships: Evidence from Small Business Data

@article{Petersen1994TheBO,
  title={The Benefits of Lending Relationships: Evidence from Small Business Data},
  author={M. Petersen and Raghuram G. Rajan},
  journal={Journal of Finance},
  year={1994},
  volume={49},
  pages={3-37}
}

M. Petersen, Raghuram G. Rajan

Published 1994

Economics

Journal of Finance

This paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm. The authors analyze data collected in a survey of small firms by the Small Business Administration. The primary benefit of building close ties with an institutional creditor is that the availability of financing increases. The authors find smaller effects on the price of credit. Attempts to widen the circle of relationships by borrowing from multiple leaders increases… CONTINUE READING

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