scholarly journals Has previous loan rejection scarred firms from applying for loans during Covid-19?

2021 ◽  
Author(s):  
Marc Cowling ◽  
Weixi Liu ◽  
Raffaella Calabrese
Keyword(s):  
Small Businesses ◽  
English Summary ◽  
Bank Loans ◽  
Loan Portfolio ◽  
Loan Guarantee ◽  
Loan Demand ◽  
Economic Shock ◽  
The Government ◽  
The Uk ◽  
Guaranteed Loans

Abstract The concept of the ‘discouraged’ borrower is well documented. In this paper, we consider whether smaller firms in the UK who have been previously rejected for bank loans have been scarred by the experience so badly that even in the presence of two exceptionally generous Covid-19 loan guarantee schemes, they still refuse to make an application. Furthermore, we also consider what happens when they do. As banks have either zero or minimal loss exposure, do they still maintain their normal strict lending protocols or do they relax their standards to fulfil the governments’ objective of supporting struggling businesses through the crisis? Our findings show that 72% of previously rejected borrowers are reluctant to request loans. We find some evidence that previously scarred firms faced such severe liquidity problems that they relaxed their distrust of banks during the Covid-19 crisis. However, their share of the government-guaranteed loan portfolio was slightly lower suggesting that banks were treating each new loan application on its merits. Plain English Summary The Covid-19 crisis hit smaller businesses so hard that even previously rejected borrowers were forced to apply for loans to keep them afloat. Previous loan rejections have not discouraged small businesses in the UK in applying for Covid-19 government-guaranteed loans. Banks have used the loan guarantee schemes to continue to supply loans to small business during the pandemic. Our paper analyses the important phenomenon of borrower scarring and discouragement, when potential debtors are self-excluded from the lending market because they have previous rejections or expect a negative bank response. We consider around 45,000 UK small businesses from 2018 to 2020. On the demand side, we find that the economic shock for small businesses during the pandemic dissipates the scarring effect. Specifically, we find that micro and small businesses had the highest loan demand in the first two quarters of the pandemic (from March 2020). On the supply side, we show that scarred borrowers were not routed onto Covid-19 government-guaranteed loan schemes. These findings show the importance of government-backed lending schemes for small businesses during crisis period.

The History of Credit in America

2019 ◽  
Author(s):  
Rowena Olegario
Keyword(s):  
World War I ◽  
Small Businesses ◽  
Trade Credit ◽  
Student Loans ◽  
The United States ◽  
Bank Loans ◽  
World War ◽  
Private Credit ◽  
The Government ◽  
Home Mortgages

The United States is a nation built on credit, both public and private. This article focuses on private credit: that is, credit extended to businesses and consumers by private entities such as banks, other businesses, and retail stores. Business credit involves short-term lending for items such as inventories, payroll, and the like; and long-term lending for the building of factories, offices, and other physical plant. Trade credit, bank loans, bonds, and commercial paper are all forms of business credit. Consumer credit is extended to individuals or households to fund purchases ranging from basic necessities to homes. Informal store credits, installment sales, personal loans from banks and other institutions, credit cards, home mortgages, and student loans are forms of consumer credit. Until the 20th century, the federal government remained mostly uninvolved in the private credit markets. Then, after World War I and especially during the Great Depression, the government deliberately expanded the credit available for certain targeted groups, such as farmers and home buyers. After World War II the government helped to expand lending even further, this time to small businesses and students. Mostly the government accomplished its goal not through lending directly but by insuring the loans made by private entities, thereby encouraging them to make more loans. In the case of home mortgages and student loans, the government took the lead in creating a national market for securitized debt—debt that is turned into securities, such as bonds, and offered to investors—through the establishment of government-sponsored enterprises, nicknamed Fannie Mae (1938), Ginnie Mae (1968), Freddie Mac (1970), and Sallie Mae (1972). Innovations such as these by businesses and government made credit increasingly available to ordinary people, whose attitudes toward borrowing changed accordingly.

scholarly journals Perceived Barriers Of E-Commerce Expansion In The Electronic Manufacturing Companies In Malaysia

2011 ◽  
Vol 3 (10) ◽  
Author(s):  
Syed Shah Alam ◽  
Ali Khatibi ◽  
Chloe Teah Woon Sim ◽  
Ahasanul Haque
Keyword(s):  
Small Businesses ◽  
Bank Loans ◽  
Perceived Barriers ◽  
Manufacturing Companies ◽  
Electronic Manufacturing ◽  
Doing Business ◽  
Regulatory Frameworks ◽  
Start Up ◽  
The Government ◽  
Set Up

This study examines the major barriers that prevent manufacturing companies in Malaysia from adopting e-commerce. The major barriers of e-commerce expansion were security of payment and uncertain nature of legal and regulatory frameworks. Also the empirical findings reveal that doing business over Internet involves high start-up cost. In fact it is costly to set-up business electronically, because so many technological appliances are involved. Computers are quite expensive to buy limited maintenance facility issue to take advantage of EC. This issue is really affecting small businesses. Therefore, in order to attract and motivate the adoption of EC, the government has to support this sector fully by providing bank loans or subsidiaries.

First Steps towards Self-Employment – Microcredit for Enterprise in Scotland

2014 ◽  
Vol 23 (2) ◽  
pp. 169-191 ◽  
Author(s):  
Neil McHugh ◽  
Morag Gillespie ◽  
Jana Loew ◽  
Cam Donaldson
Keyword(s):  
Economic Policy ◽  
Small Businesses ◽  
Enterprise Development ◽  
Grameen Bank ◽  
Economic Strategy ◽  
Self Employment ◽  
Start Up ◽  
The Uk ◽  
Poor Communities

While lending for small businesses and business start-up is a long-standing feature of economic policy in the UK and Scotland, little is known about the support available for those taking the first steps into self-employment, particularly people from poorer communities. This paper presents the results of a project that aimed to address this gap. It mapped provision of support for enterprise, including microcredit (small loans for enterprise of £5,000 or less) and grants available to people in deprived communities. It found more programmes offering grants than loans. Grants programmes, although more likely to be time limited and often linked to European funding, were generally better targeted to poor communities than loan programmes that were more financially sustainable. The introduction of the Grameen Bank to Scotland will increase access to microcredit, but this paper argues that there is a place – and a need – for both loans and grants to support enterprise development across Scotland. A Scottish economic strategy should take account of all levels of enterprise development and, in striving towards a fairer Scotland, should ensure that the poorest people and communities are not excluded from self-employment because of the lack of small amounts of support necessary to take the first steps.

scholarly journals Effects of Regional Bank Merger on Small Business Borrowing: Evidence from Japan

2015 ◽  
Vol 7 (11) ◽  
pp. 62
Author(s):  
Hironobu Miyazaki ◽  
Hiroyuki Aman
Keyword(s):  
Small Business ◽  
Small Businesses ◽  
Economies Of Scale ◽  
Loan Portfolio ◽  
Small Business Lending ◽  
Borrowing Costs ◽  
Bank Merger ◽  
Regional Bank ◽  
Small Business Loans ◽  
The Impact

This study examines the impact of a regional bank merger in Japan on borrowing by small businesses, focusing on firms that borrow from the acquiring bank, the acquired bank, or both. First, we find that post-merger borrowing costs declined. This result suggests that small borrowers enjoy more favorable post-merger financing conditions because efficiencies from economies of scale lead to lower costs. Second, we<strong> </strong>find that post-merger borrowing costs decline for firms that borrow only from the acquiring or acquired bank, whereas they did not decline for firms that borrow from both. Third, we find that only small business loans to firms that borrow from both the acquiring and acquired banks decrease post-merger. This result suggests that small business lending might decline because of a merged bank’s loan portfolio and lending strategy.

scholarly journals Public governance, agility and pandemics: a case study of the UK response to COVID-19

2021 ◽  
pp. 002085232098340
Author(s):  
Paul Joyce
Keyword(s):  
Leadership Role ◽  
Public Confidence ◽  
Strategic Decisions ◽  
Public Governance ◽  
Local Initiative ◽  
Government Response ◽  
Local Resources ◽  
The Government ◽  
The One ◽  
The Uk

The UK government’s leaders initially believed that it was among the best-prepared governments for a pandemic. By June 2020, the outcome of the collision between the government’s initial confidence, on the one hand, and the aggressiveness and virulence of COVID-19, on the other, was evident. The UK had one of the worst COVID-19 mortality rates in the world. This article explores the UK government’s response to COVID-19 from a public administration and governance perspective. Using factual information and statistical data, it considers the government’s preparedness and strategic decisions, the delivery of the government response, and public confidence in the government. Points for practitioners Possible lessons for testing through application include: Use the precautionary principle to set planning assumptions in government strategies to create the possibility of government agility during a pandemic. Use central government’s leadership role to facilitate and enable local initiative and operational responses, as well as to take advantage of local resources and assets. Choose smart government responses that address tensions between the goal of saving lives and other government goals, and beware choices that are unsatisfactory compromises.

scholarly journals Rhetorical uses of precise numbers and semi-magical round numbers in political discourse about COVID-19: Examples from the government of the United Kingdom

2021 ◽  
pp. 095792652110131
Author(s):  
Michael Billig
Keyword(s):  
19Th Century ◽  
British Government ◽  
Political Incentives ◽  
The United Kingdom ◽  
Round Numbers ◽  
Magical Power ◽  
Uk Government ◽  
The Government ◽  
The Uk ◽  
The 19Th Century

This paper examines how the British government has used statistics about COVID-19 for political ends. A distinction is made between precise and round numbers. Historically, using round numbers to estimate the spread of disease gave way in the 19th century to the sort precise, but not necessarily accurate, statistics that are now being used to record COVID-19. However, round numbers have continued to exert rhetorical, ‘semi-magical’ power by simultaneously conveying both quantity and quality. This is demonstrated in examples from the British government’s claims about COVID-19. The paper illustrates how senior members of the UK government use ‘good’ round numbers to frame their COVID-19 goals and to announce apparent achievements. These round numbers can provide political incentives to manipulate the production of precise number; again examples from the UK government are given.

The RUMA Alliance targets: an overview

Livestock ◽  
2021 ◽  
Vol 26 (4) ◽  
pp. 176-179
Author(s):  
Chris Lloyd
Keyword(s):  
Task Force ◽  
Animal Health ◽  
Antibiotic Use ◽  
Codes Of Practice ◽  
The Government ◽  
The Uk ◽  
Ongoing Support ◽  
The Impact ◽  
Insight Into ◽  
Roll Out

The Responsible Use of Medicines in Agriculture Alliance (RUMA) was established to promote the highest standards of food safety, animal health and animal welfare in the British livestock industry. It has a current focus to deliver on the Government objective of identifying sector-specific targets for the reduction, refinement or replacement of antibiotics in animal agriculture. The creation and roll out of sector specific targets in 2017 through the RUMA Targets Task Force, has helped focus activity across the UK livestock sectors to achieve a 50% reduction in antibiotic use since 2014. This has been realised principally through voluntary multi-sector collaboration, cross sector initiatives, codes of practice, industry body support and farm assurance schemes. This article provides an overview of RUMA's work to date providing insight into the methods used to create the targets, why they are so important, the impact they are having and how ongoing support and robust data are vital components in achieving the latest set of targets.

scholarly journals Who shuns entrepreneurship journals? Why? And what should we do about it?

2021 ◽  
Author(s):  
Alex Stewart
Keyword(s):  
Small Business ◽  
Business Schools ◽  
English Summary ◽  
Business Economics ◽  
Economics Journal ◽  
The Us ◽  
The Usa ◽  
Business Professors ◽  
The Uk

AbstractSome scholars assert that entrepreneurship has attained “considerable” legitimacy. Others assert that it “is still fighting” for complete acceptance. This study explores the question, extrapolating from studies of an “elite effect” in which the publications of the highest ranked schools differ from other research-intensive schools. The most elite business schools in the USA, but not the UK, are found to allocate significantly more publications to mathematically sophisticated “analytical” fields such as economics and finance, rather than entrepreneurship and other “managerial” fields. The US elites do not look down upon entrepreneurship as such. They look down upon journals that lack high mathematics content. Leading entrepreneurship journals, except Small Business Economics Journal (SBEJ), are particularly lacking. The conclusion argues that SBEJ can help the field’s legitimacy, but that other journals should not imitate analytical paradigms.Plain English Summary Academic snobs shun entrepreneurship journals. A goal for snobs is to exhibit superiority over others. For business professors, one way to do this is with mathematically sophisticated, analytical publications. Entrepreneurship journals, Small Business Economics excepted, do this relatively infrequently. These journals focus on the lives, activities, and challenges of diverse entrepreneurs. In the USA, the most elite business schools, compared with not-quite elite business schools, allocate significantly more of their articles to the journals of analytical fields such as economics, and fewer to entrepreneurship journals. This pattern is not found in the UK, where elites may have other ways to signal superiority. These elites, who accommodate entrepreneurship researchers, could pioneer with outputs of both relevance and scholarly quality, through collaboration between their practice-based and research-based professors.

scholarly journals The future of social care funding: who pays?

2016 ◽  
Vol 22 (1) ◽  
pp. 10-44 ◽  
Author(s):  
T. Kenny ◽  
J. Barnfield ◽  
L. Daly ◽  
A. Dunn ◽  
D. Passey ◽  
...  
Keyword(s):  
Phase 1 ◽  
List Type ◽  
Political Debate ◽  
Term Care ◽  
Means Testing ◽  
Financial Products ◽  
Funding System ◽  
The Government ◽  
The Uk ◽  
Care Costs

AbstractWith the UK population ageing, deciding upon a satisfactory and sustainable system for the funding of people’s long-term care (LTC) needs has long been a topic of political debate. Phase 1 of the Care Act 2014 (“the Act”) brought in some of the reforms recommended by the Dilnot Commission in 2011. However, the Government announced during 2015 that Phase 2 of “the Act” such as the introduction of a £72,000 cap on Local Authority care costs and a change in the means testing thresholds1 would be deferred until 2020. In addition to this delay, the “freedom and choice” agenda for pensions has come into force. It is therefore timely that the potential market responses to help people pay for their care within the new pensions environment should be considered. In this paper, we analyse whether the proposed reforms meet the policy intention of protecting people from catastrophic care costs, whilst facilitating individual understanding of their potential care funding requirements. In particular, we review a number of financial products and ascertain the extent to which such products might help individuals to fund the LTC costs for which they would be responsible for meeting. We also produce case studies to demonstrate the complexities of the care funding system. Finally, we review the potential impact on incentives for individuals to save for care costs under the proposed new means testing thresholds and compare these with the current thresholds. We conclude that:∙Although it is still too early to understand exactly how individuals will respond to the pensions freedom and choice agenda, there are a number of financial products that might complement the new flexibilities and help people make provision for care costs.∙The new care funding system is complex making it difficult for people to understand their potential care costs.∙The current means testing system causes a disincentive to save. The new means testing thresholds provide a greater level of reward for savers than the existing thresholds and therefore may increase the level of saving for care; however, the new thresholds could still act as a barrier since disincentives still exist.

scholarly journals Changing the rules of the game: some necessary legal reforms to United Kingdom intelligence

2009 ◽  
Vol 35 (4) ◽  
pp. 943-955 ◽  
Author(s):  
IAN LEIGH
Keyword(s):  
National Security ◽  
The Political ◽  
Legal Proceedings ◽  
Legal Reforms ◽  
Political Independence ◽  
The Us ◽  
Protection Of Human Rights ◽  
The Government ◽  
The Uk ◽  
Rules Of The Game

AbstractThis article argues that there is a need to modernise the law governing accountability of the UK security and intelligence agencies following changes in their work in the last decade. Since 9/11 the agencies have come increasingly into the spotlight, especially because of the adoption of controversial counter-terrorism policies by the government (in particular forms of executive detention) and by its international partners, notably the US. The article discusses the options for reform in three specific areas: the use in legal proceedings of evidence obtained by interception of communications; with regard to the increased importance and scle of collaboration with overseas agencies; and to safeguard the political independence of the agencies in the light of their substantially higher public profile. In each it is argued that protection of human rights and the need for public accountability requires a new balance to be struck with the imperatives of national security.

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