Publication: Funding Self-Employment – The Role of Consumer Credit
Date
2012-02-15
ISSN
0003-6846
Published
2012-02-15
Author(s)
Kneiding, Christoph
Kritikos, Alexander S.
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.