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Internal resources, bank credit and other funding sources : what are the alternatives for businesses in Belgium?

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  • Ch. Piette

    (National Bank of Belgium)

  • M.-D. Zachary

    (National Bank of Belgium)

Abstract

Businesses are partly reliant on whatever sources of funding they can find for their activity and development. Quite independently of the resources they generate through retained earnings, the financing instruments actually used by firms depend on their respective costs, as well as on the nature of the funding requirements and the firms’ own characteristics. Firms forming part of a group have certain facilities at their disposal, such as access to liquidity reserves common to their group. Other companies, which make up the lion’s share of Belgian firms, do not have such financing facilities and usually resort to bank credit which plays a predominant role in funding SMEs. However, some firms have more limited access to bank loans ; this is particularly true of innovative companies, that have a more risky profile, and, for this reason, are reliant on other sources of funding (non-bank loans in particular).

Suggested Citation

  • Ch. Piette & M.-D. Zachary, 2016. "Internal resources, bank credit and other funding sources : what are the alternatives for businesses in Belgium?," Economic Review, National Bank of Belgium, issue i, pages 63-83, June.
    • Handle: RePEc:nbb:ecrart:y:2016:m:june:i:i:p:63-83
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    References listed on IDEAS

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    More about this item

    Keywords

    corporate finance; corporate investment; firm level;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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