For many years, bank decision-makers and academic researchers have recognized the significance of both commercial banks and small businesses to the overall economy of America. However, there appears to be little, if any, statistically valid empirical research dealing with the decision-making processes in commercial banks which commit funds to small businesses. This article deals specifically with the decision-making process of 30 commercial loan decision-makers as they are faced with commercial loan selection decisions concerning Small Business (SBA guaranteed) new business loans.
Get full access to this article
View all access options for this article.
References
1.
AbateR. P.“Numerical Scoring System for Commercial Loans.”Bankers Monthly Magazine, 86: 38–39, 50 (January, 1969).
2.
BaughnW. E., and WalkerC. E., eds. The Bankers Handbook.Homewood, Illinois: Dow Jones-Irwin, Inc., 1978.
3.
BiborishR. A.“Credit Scoring Systems Have Built-in Bonuses.”Bankers Monthly, 84: 40–44(March, 1967).
4.
CohenK. J., and HammerF. S., eds. Analytical Methods In Banking.Homewood, Illinois: R. D. Irwin, 1966.
5.
DurandD.“Risk Elements in Consumer Installment Financing” (Study #8). New York: National Bureau of Economic Research, 1941.
6.
HammerF. S., and OrglerY. E.“Developments in Credit Scoring for Commercial Loans.”Journal of Commercial Bank Lending, 21: 25–31(July, 1969).
7.
HettenhouseG. W., and WentworthJ. R.“Credit Analysis Model — A New Look for Credit Scoring.”Journal of Commercial Bank Lending, 54: 26–31(December, 1971).
8.
Interviews with J. Crump, Texas Commerce Bank, Hurst, Texas, 3 January 1979 and 5 April 1979.
9.
Interviews with V. W. Henley, Consolidated Bank and Trust, Richmond, Virginia, 2 January 1980, 29 January 1980, 21 February 1980.
10.
Interviews with J. W. Mitchell, III, Branch Bank and Trust, Wilson, North Carolina, 5 January 1979, 1 May 1979, 3 December 1979, 9 January 1980 and 1 February 1980.
11.
Interviews with L. Nelson, First and Merchants Bank, Roanoke, Virginia, 5 December 1979, 12 December 1979, 20 December 1979, 10 January 1980, and 4 February 1980.
12.
Interviews with G. Peck, Colonial American Bank, Roanoke, Virginia, 5 December 1979, 12 December 1979, 20 December 1979, 10 January 1980, 4 February 1980.
13.
Interview with W. B. Ragley, Euless National Bank, Euless, Texas, 15 February 1980.
14.
JonesN.The Establishment of an Empirically-Based Set of Selection Criteria in Six Commercial Banks. Ph.D. Dissertation, Virginia Polytechnic Institute and State University, 1980.
15.
LongM. S.Credit Screening System Selection. Ph.D. Dissertation, Purdue University, 1973.
16.
MitchellJ. A.III“A General Credit Model: A Tool for Loan Officer Training and Decision-Making.” MBA Thesis, Rutgers University, 1976.
MyersJ. H., and ForgyE. W.“The Development of Numerical Credit Evaluation Systems.”Journal of the American Statistical Association, 58: 799–806(December, 1963).
19.
OrglerY. E.“A Credit-Scoring Model for Commercial Loans.”Journal of Money, Credit and Banking, 2: 435–445(November, 1970).
ReedE. W., et al. Commercial Banking.Englewood Cliffs, New Jersey: Prentice-Hall Inc., 1976.
22.
SnowdonD. T.“Financial Analysis for Credit Decisions” in BaughnW. H., and WalkerC. E., eds. The Bankers Handbook (Homewood, Illinois: Dow Jones-Irwin, Inc., 1978). pp. 579–601.
23.
SteinhoffD.Small Business Management Fundamentals.New York: McGraw-Hill, 1978.
24.
TeplitzP. V.Trends Affecting the U.S. Banking System.Cambridge, Massachusetts: Ballinger, 1976.
25.
WortmanM. S.Jr. and JonesN.“Small Business Loans: The Establishment of an Empirically-Based Selection Criteria in Commercial Banks.” Paper presented at the 39th Annual Academy of Management Meeting, Atlanta, Georgia, 4 August 1979.
