You can manage bookmarks using lists, please log in to your user account for this.
Media type:
E-Article
Title:
Measuring the Default Risk of Small Business Loans: A Survival Analysis Approach
Contributor:
Glennon, Dennis;
Nigro, Peter
imprint:
Ohio State University Press, 2005
Published in:Journal of Money, Credit and Banking
Language:
English
ISSN:
0022-2879;
1538-4616
Origination:
Footnote:
Description:
<p>In this paper we report that, although medium-maturity loans originated under the SBA 7(a) loan guarantee program are targeted to small firms that fail to obtain credit through conventional channels, the default experience is comparable to that of a large percentage of loans held by larger commercial banks. We establish that the default behavior of these loans is time sensitive-as a loan seasons, the likelihood of default increases initially, peaks in the second year, and declines thereafter. Using a discrete-time hazard framework, we show that the likelihood of default is conditional on borrower, lender, and loan characteristics, and changes in economic conditions.</p>