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Start-up financing, owner characteristics, and survival

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  • Astebro, Thomas
  • Bernhardt, Irwin

Abstract

We investigated the relation between the survival of new small businesses and bank loans. This was done using a model that included other loan sources, human capital variables, and company and industry descriptors. We found there is a negative correlation between having a bank loan and business survival, and a positive correlation between having a non-bank loan and survival. However, having a bank loan was a ceteris paribus positive predictor of the survival of start-up companies. Our findings enabled some inferences about the process of loan source selection by start-up business owners, and about the banks' loan granting process.
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Suggested Citation

  • Astebro, Thomas & Bernhardt, Irwin, 2003. "Start-up financing, owner characteristics, and survival," Journal of Economics and Business, Elsevier, vol. 55(4), pages 303-319.
    • Handle: RePEc:eee:jebusi:v:55:y:2003:i:4:p:303-319
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