Keywords: Venture capital, small business lending, bank, mergers
Abstract: We examine the economics of financing small business in private equity
and debt markets. Firms are viewed through a financial growth cycle
paradigm in which different capital structures are optimal at
different points in the cycle. We show the sources of small business
finance,and how capital structure varies with firm size and age. The
interconnectedness of small firm finance is discussed along with the
impact of the macroeconomic environment. We also analyze a number of
research and policy issues, review the literature, and suggest topics
for future research.
Full paper (4077 KB PDF)
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Last update: April 21, 1998