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The impact of credit availability on small and medium companies

Author

Listed:
  • Bogdan Włodarczyk

    (University of Warmia and Mazury [Olsztyn])

  • Marek Szturo

    (University of Warmia and Mazury [Olsztyn])

  • George H. Ionescu

    (Romanian-American University)

  • Daniela Firoiu

    (Romanian-American University)

  • Ramona Pirvu

    (University of Craiova)

  • Roxana Badircea

    (University of Craiova)

Abstract

Existing research proves that companies' access to bank loans or other external sources of financing for business development is one of the defining factors of the survival and development of a company on the market. This is all the more important in the case of small and medium-sized companies, knowing that they face a series of difficulties in obtaining financing from banking institutions, especially due to an insufficient amount of information needed provided to banks and needed by them to analyze the opportunity for a loan. However, as the economic and financial conditions of a company are better, the more information is available to banks and the credit availability is higher. By this research we analyse the factors affecting the credit availability and their influence on development of Polish small and medium companies, such as company's size and age, financial results or the length of relationship with the banking institution, as well as the features characterizing the banking sector. The results demonstrate that in Poland, similarly to other European countries, small and medium companies have a more limited access to credit availability than large companies. Moreover, a significant dependence of bank credit availability from the size of the company, liquidity, profitability and the situation in the banking sector was demonstrated.

Suggested Citation

  • Bogdan Włodarczyk & Marek Szturo & George H. Ionescu & Daniela Firoiu & Ramona Pirvu & Roxana Badircea, 2018. "The impact of credit availability on small and medium companies," Post-Print hal-01773998, HAL.
    • Handle: RePEc:hal:journl:hal-01773998
    DOI: 10.9770/jesi.2018.5.3(12)
    Note: View the original document on HAL open archive server: https://hal.science/hal-01773998
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    References listed on IDEAS

    as
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    3. Teodor Marian Cojocaru & George H. Ionescu & Daniela Firoiu & Laura Mariana Cismaș & Maria Daniela Oțil & Ovidiu Toma, 2022. "Reducing Inequalities within and among EU Countries—Assessing the Achievement of the 2030 Agenda for Sustainable Development Targets (SDG 10)," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
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    5. Skalická Martina & Zinecker Marek & Pietrzak Michał B. & Meluzín Tomáš & Dohnal Mirko, 2019. "Financial impact analysis of going public at the Warsaw Stock Exchange: Using Fuzzy Set Theory to understand behaviours of mature companies," Management & Marketing, Sciendo, vol. 14(1), pages 59-79, March.

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    Keywords

    small and medium enterprises; credit availability; banking sector;
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