M. Cowling
Loan Guarantee Schemes in the UK: The Natural Experiment of the Enterprise Finance Guarantee and the 5 Year Rule
Cowling, M.; Robson, P.; Stone, I.; Allinson, G.
Authors
P. Robson
I. Stone
G. Allinson
Abstract
Loan guarantee schemes have existed since 1953 (in the US) and are widely used throughout the world to provide financial support to smaller firms by guaranteeing loans from commercial banks. The UK government has been an active supporter of loan guarantees since 1981, and has a long track record of modifying its scheme to reflect changing market conditions and the financing needs of its SME sector. Arguably the two most significant changes occurred in 2008 when the 5-Year Rule on eligibility was removed and in 2009 when the long-standing Small Firms Loan Guarantee Scheme was replaced by the Enterprise Finance Guarantee Scheme. We treat the removal of the 5-Year Rule as a natural policy experiment and empirically question whether, on economic grounds, this was a sensible policy. Our findings suggest that the 5-Year Rule was a better policy choice with regard to employment but had no impact on sales growth.
Citation
Cowling, M., Robson, P., Stone, I., & Allinson, G. (2018). Loan Guarantee Schemes in the UK: The Natural Experiment of the Enterprise Finance Guarantee and the 5 Year Rule. Applied Economics, 50(20), 2210-2218. https://doi.org/10.1080/00036846.2017.1392004
Journal Article Type | Article |
---|---|
Acceptance Date | Oct 6, 2017 |
Online Publication Date | Oct 23, 2017 |
Publication Date | Apr 27, 2018 |
Deposit Date | Oct 23, 2017 |
Publicly Available Date | Apr 23, 2019 |
Journal | Applied Economics |
Print ISSN | 0003-6846 |
Electronic ISSN | 1466-4283 |
Publisher | Taylor and Francis Group |
Peer Reviewed | Peer Reviewed |
Volume | 50 |
Issue | 20 |
Pages | 2210-2218 |
DOI | https://doi.org/10.1080/00036846.2017.1392004 |
Public URL | https://durham-repository.worktribe.com/output/1342093 |
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Copyright Statement
This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics on 23 Oct 2017, available online: http://www.tandfonline.com/10.1080/00036846.2017.1392004.
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