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Leasing, a Solution to Credit Rationing

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  • Georgescu Maria - Andrada

    () (National School of Political Studies and Public Administration)

Abstract

In this paper, we shall examine if leasing is a solution to credit rationing, considering that the limiting of the bank credit supply will determine the orientation of enterprises towards leasing. This argument was brought in the specialty literature by [9]. They consider leasing “the last financing resort”. The statement is justified by the rights the lessors have in case of bankruptcy of the user company. For [9], unlike the previous works, the comparison must not be made between leasing and the ordinary debt, but between leasing and secured debt. The weighing of the advantages and limits of the two forms of financing will allow the analysis of the choice of financing by the enterprises, when the constraints of the capital supply force them towards expensive solutions. In a first section, we shall introduce the concept of credit rationing and we shall analyze its effects on the financing policy of the enterprise. Then, we shall appreciate the qualities of leasing, respectively of the secured debt, and we shall justify the nature of the financing mobilized by the companies when the bankruptcy risk increases.

Suggested Citation

  • Georgescu Maria - Andrada, 2010. "Leasing, a Solution to Credit Rationing," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 1602-1607, May.
  • Handle: RePEc:ovi:oviste:v:10:y:2010:i:1:p:1602-1607
    as

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    References listed on IDEAS

    as
    1. Grigorescu, Adriana, 2009. "Renewal marketing management in public and business organizations," MPRA Paper 25128, University Library of Munich, Germany.
    2. Nicolae Al. Pop & Anca-Daniela Vl?doi, 2009. "The marketer-a complex specialist, a man of concept, decision and action," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 11(25), pages 9-20, February.
    3. Kaplan, Andreas M. & Haenlein, Michael, 2009. "The increasing importance of public marketing: Explanations, applications and limits of marketing within public administration," European Management Journal, Elsevier, vol. 27(3), pages 197-212, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    leasing; credit rationing; financing policy; qualities of leasing; bankruptcy risk.;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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