Premium
A NOTE ON THE USE OF SELECTED NONFINANCIAL RATIO VARIABLES TO PREDICT SMALL‐BUSINESS LOAN PERFORMANCE *
Author(s) -
Cowen Scott S.,
Page Albert L.
Publication year - 1982
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1982.tb00131.x
Subject(s) - loan , business , non performing loan , small business , actuarial science , econometrics , finance , economics
Small business loan applications have not been evaluated successfully by traditional methods. This paper explores the possibility of using three types of nonfinancial ratio variables (owner, firm, and loan characteristics) to predict whether a small business will pay off or default its loan. The owner and loan variables were better predictors of loan success than the firm variables.