Funding self-employment - the role of consumer credit
Source: Applied Economics, Volume 45, Number 13, 1 May 2013 , pp. 1741-1749(9)
Abstract:This article investigates whether self-employed households use consumer loans - in particular, instalment loans and overdrafts - to finance business activities. Controlling for financial and nonfinancial household variables, we show that self-employed households particularly use personal overdrafts significantly more often than employee households. When analysing the correlation between consumer loan take-ups and consumption of self-employed in comparison to employee households, we find first evidence that overdrafts are used by self-employed to finance their business as well. This indicates that intermingling constitutes a financing strategy when regular business loans might not be accessible.
Document Type: Research article
Publication date: 2013-05-01