Trade Credit and Its Role in Entrepreneurial Finance

Item Type Book Section
Abstract Recent research has found evidence of the central role of trade credit in the financing of small businesses. In the United States, for example, trade credit is used by about 60 percent of small businesses; such a large incidence of use is not observed in any other financial service except checking accounts. This article analyzes several aspects of the trade credit agreement. It starts by explaining why trade credit is such an extended phenomenon in spite of the existence of a specialized financial sector. Then it discusses several aspects that make trade credit a unique and not fully contractual arrangement, whose value depends to a great extent on the value of the commercial relationship between the supplier and the buyer. It then focuses on the value of trade credit for entrepreneurial firms.
Authors Cunat, Vicente & García-Appendini, Emilia
Editors Cumming, Douglas
Language English
Subjects economics
HSG Classification not classified
Refereed No
Date 2012
Publisher Oxford University Press
Place of Publication Oxford
Series Name Entrepreneurial finance
Page Range 526-557
Number of Pages 32
Title of Book The Oxford handbook of entrepreneurial finance
ISBN 978-0-19-539124-4
Publisher DOI
Depositing User Prof. PhD Emilia García-Appendini
Date Deposited 28 Sep 2012 11:55
Last Modified 23 Aug 2016 11:14


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Cunat, Vicente & García-Appendini, Emilia: Trade Credit and Its Role in Entrepreneurial Finance. In Cumming, Douglas (ed.): The Oxford handbook of entrepreneurial finance. Oxford : Oxford University Press, 2012, S. 526-557.

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