Business, Management and Accounting
4 years ago

Shorter loan maturities help mitigate risks for small businesses.

RePEc: Research Papers in Economics
Lending to Small Businesses : The Role of Loan Maturity in Adressing Information Problems
Hernán Ortiz‐Molina, Marı́a Fabiana Penas

Paper Summary

The length of loans to small businesses is influenced by factors like collateral, financial health, and credit history. Stronger relationships between businesses and lenders don't necessarily lead to longer loan terms. Shorter loan lengths help lenders keep a closer eye on riskier borrowers.

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