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Why Do Firms Strategically Delay Payments of Corporate Loans?

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  • Ahmet Deryol

Abstract

Firms may prefer to delay some loan payments while continuing to service others because of lender and loan characteristics. I explore the impact of bank-level and bank–firm-level indicators on the strategic delay behaviors of nonfinancial corporations. Three factors play a key role in their strategic delay decisions. First, strategic delay events occur more when the likelihood of obtaining additional and high-quality funding in the future is limited. Second, firms are more reluctant to delay payments of loans strategically that are easier to repay. Third, firms are more likely to delay payments when the anticipated cost of delaying is low. Importantly, as the financial literacy levels of firm owners increase, the likelihood of a strategic delay event decreases.

Suggested Citation

  • Ahmet Deryol, 2026. "Why Do Firms Strategically Delay Payments of Corporate Loans?," Working Papers 2608, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    • Handle: RePEc:tcb:wpaper:2608
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    File URL: https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2026/26-08
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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