In the aftermath of the latest financial crisis, policy-makers at all levels are concerned about the impact of the crisis on access to financial resources by young firms, particularly as major changes occur in bank-lending practices and uncertainties surround the implementation of financial reform legislation. In this paper, we analyze the types and sources of financing used in young firms over the years 2007 through 2009. We find differential outcomes for firms who applied for loans and received them, those who applied and were denied, and those which did not apply for fear of denial. We explore the factors that mitigate the decision to apply for a loan and the subsequent outcomes of firm survival and growth. Our work provides insights into the relative importance of supply and demand for financing both prior to and subsequent to the financial shocks. We leverage various measures and perceptions to disentangle the decision to seek bank loans from the likelihood of receiving a loan based on credit scores and other objective measures. We find that both tangible and intangible assets, particularly intellectual property, play a significant role in receipt of bank loans in the firms’ early years of operation.
Resource Category: Policy
Economic Growth Agenda for CA
How California can retake control and drive forward again, moving California back into the lead on sustainable growth and real job creation—regaining our leadership role as America’s opportunity capital.
WIA: How is Federal Funding Spent?
Hundreds of millions of dollars are allocated annually to California through the federal Workforce Investment Act, and most local Workforce Investment Boards report spending far less on job training than on employment services at One-Stop Career Centers.
Evaluating Mentorship Programs
Mentor-Protégé Programs exist in many federal agencies to help small businesses gain technical and business skills from large prime contractors and to build networks and experience that will help them compete and succeed in the federal contracting landscape. Started by the Department of Defense in 1991, there are now many versions of Mentor-Protégé Programs that share similar objectives but have different programmatic and incentive structures. The National Women’s Business Council conducted a research initiative to learn how well Mentor-Protégé Programs are serving women-owned businesses and how they might be strengthened to help women-owned businesses become an even greater engine driving economic recovery.
Job Creation on a Budget
Properly designed, industry clusters are a low-cost way to stimulate innovation, new-firm start-ups, and job creation by helping to link and align the many factors that influence firm and regional growth.
Policy Priorities of Women Business Owners
On June 16, 2010, a summit of women business owners was held in Salem, Massachusetts, at the historic Hawthorne Hotel. Since the earliest Colonial times, Salem has been a major commercial center in a regional economy based on industries as varied as international maritime spice trade and textile manufacturing. Now, as the Greater Boston/North Shore region builds a twenty-first-century economy based on tourism, technology, and creativity, women entrepreneurs have the opportunity to play a key role. At this summit, women business owners on Boston’s North Shore shared their priorities, challenges, and concerns to help the National Women’s Business Council (NWBC) to articulate policy recommendations for the consideration of the President, Congress, and the U.S. Small Business Administration (SBA).
Microenterprises in the Economy
A Senate Office of Research report concerning the microenterprise sector in California, the number of microenterprises in California, the number of persons employed and jobs created by them, share of workforce in urban and rural counties, and changes in state/federal tax revenues due to the sector.
Latina Entrepreneurship Trends
Latinos play an important role in the self-employment growth. Fueled by immigration, they are the largest and fastest growing minority group in the US. With high employment rates and a lack of labor market success, what are alternative policies to improve economic outcomes?
Policy Priorities of Women Business Owners
On April 29, 2009, a town hall meeting of women business owners was held in Atlanta at the Georgia Institute of Technology’s Student Center. Hosted and facilitated by the National Women’s Business Council (NWBC), this meeting was the seventh in a series of meetings that began in March 2007. NWBC designed these conversations to generate grassroots‐level recommendations from women business owners for the ultimate consideration of the President, Congress, and the U.S. Small Business Administration (SBA).
Tiny Business Creates Large Change
The real heart of job growth in the small business community is businesses with fewer than five employees. Addressing the needs of this segment can generate profound positive economic and social consequences.