Abstract
This paper reports survey results regarding leasing practices of small firms. Small firms that lease are more likely to be relatively large manufacturing firms which exhibit higher debt ratios and higher sales growth. The survey responses as well as empirical analyses of pertinent data reveal that the relationship between debt and leasing is complementary. Unlike their larger counterparts, small firms seldom use text-book recommended lease-borrow decision models. Also, unlike large firms, small firms are more likely to offer “dubious” reasons, such as off-balance sheet accounting and 100 percent financing, as advantages of leasing.
JEL Codes
L25, G32
Keywords
Small Firms , Leasing, Small Business
Recommended Citation
Bathala, Chenchuramaiah T. and Mukherjee, Tarun K.
(1995)
"A Survey of Leasing in Small Firms,"
Journal of Small Business Finance:
Vol. 4:
Iss.
2, pp. 113-127.
DOI: https://doi.org/10.57229/2373-1761.1171
Available at:
https://digitalcommons.pepperdine.edu/jef/vol4/iss2/2
