SMEs' Loan Terms Determined by Business Health, Collateral, and Soft Info.
The study looked at what affects the cost and conditions of bank loans for small businesses in Malaysia. They surveyed 74 small businesses that got loans and found that the businesses' situation and ability to provide collateral influenced the interest rates. Factors like the business's capital and character affected the non-price terms of the loans. The study also showed that soft information, like the business owner's reputation, played a big role in determining both the cost and conditions of the loans.