Studies of Small Business Finance: Loan Rates, Operating Costs and Size of Loan: The Evidence from Cross-Section Data

摘要

In this study, the author uses mathematical models to establish the relationship between (1) loan interest rates and loan size and (2) operating costs and loan size. In the discussion of loan rate and loan size, the model is explained in terms of factors that would affect the interest rate charged. These factors include: use of collateral, fixed or floating interest rate, the demand status of the loan, and whether the lender had a prior commitment to make the loan as well as the size of the loan. In the discussion of operating cost and loan size, five influencing factors besides loan size were cited: Number of loans in the portfolio, the lender's mix of loan types, average loan size, lender's wage rate, and lender's numbr of full service loan size constant, the study found a substantial inverse relationship between operating costs and loan size. A bibliography is provided.