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How will a credit crunch affect small business finance?

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  • Gregory F. Udell

Abstract

This Economic Letter explores how the credit crunch might affect small business access to finance. While it is not possible to know how severe this credit crunch will become, researchers can explore how the crunch could affect small business finance. We begin our analysis by looking at how small businesses access external sources of finance. Then we consider how these sources might be affected by the crunch.

Suggested Citation

  • Gregory F. Udell, 2009. "How will a credit crunch affect small business finance?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue mar6.
    • Handle: RePEc:fip:fedfel:y:2009:i:mar6:n:2009-09
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    References listed on IDEAS

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    1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    2. Berger, Allen N. & Miller, Nathan H. & Petersen, Mitchell A. & Rajan, Raghuram G. & Stein, Jeremy C., 2005. "Does function follow organizational form? Evidence from the lending practices of large and small banks," Journal of Financial Economics, Elsevier, vol. 76(2), pages 237-269, May.
    3. Berger, Allen N. & Udell, Gregory F., 2006. "A more complete conceptual framework for SME finance," Journal of Banking & Finance, Elsevier, vol. 30(11), pages 2945-2966, November.
    4. Berger, Allen N & Udell, Gregory F, 1994. "Do Risk-Based Capital Allocate Bank Credit and Cause a "Credit Crunch"' in the United States?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 585-628, August.
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    Cited by:

    1. Gregory F Udell, 2015. "SME Access to Intermediated Credit: What Do We Know and What Don't We Know?," RBA Annual Conference Volume (Discontinued), in: Angus Moore & John Simon (ed.),Small Business Conditions and Finance, Reserve Bank of Australia.
    2. Harald Oberhofer, 2014. "Die Wettbewerbsfähigkeit der österreichischen Exportwirtschaft: Die Rolle der KMUs," FIW Policy Brief series 025, FIW.
    3. Power Jane & Power Bernadette & Ryan Geraldine, 2022. "Determinants of equity financing: a demand-side analysis of Irish indigenous technology-based firms," The Irish Journal of Management, Sciendo, vol. 41(1), pages 52-68, July.
    4. Franz R. Hahn & Werner Hölzl & Claudia Kwapil, 2016. "The Credit Channel and the Role of Monetary Policy Before, During and After the Global Financial Crisis. A Micro Data Approach to the Analysis of Bank-firm Relationships," WIFO Studies, WIFO, number 59233, Juni.
    5. Werner Hölzl & Andreas Reinstaller, 2013. "Finanzierungsbeschränkungen junger technologieorientierter Unternehmen. Ergebnisse einer Unternehmensbefragung," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(8), pages 649-662, August.
    6. Horst Rottmann & Timo Wollmershäuser, 2013. "A micro data approach to the identification of credit crunches," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2423-2441, June.
    7. Wen Hua Sharpe & Peter Carey & Hong Feng Zhang, 2023. "Being private, Big 4 auditors, and debt raising," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 2295-2345, June.
    8. Holmberg, Ulf, 2012. "The Credit Market and the Determinants of Credit Crunches: An Agent Based Modeling Approach," Umeå Economic Studies 836, Umeå University, Department of Economics.
    9. Mac an Bhaird, Ciarán, 2013. "Demand for debt and equity before and after the financial crisis," Research in International Business and Finance, Elsevier, vol. 28(C), pages 105-117.

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