The determinants of online loan applications from small businesses

Purpose – The purpose of this paper is to examine both the characteristics of the business customers and the types of venture which make use of online loan applications. Despite the growth in the use of technology in banking and the advent of online banking, little research has been conducted on the factors underlying online loan application behaviour amongst business banking customers. Design/methodology/approach – A multivariate analysis is conducted on a USA dataset to empirically test the hypotheses derived in this paper. The empirical evidence is drawn from the US Survey of Small Business Finances, which contains 3,561 sample ventures, representing 5.3 million small businesses in the USA. Findings – The paper finds that online loan behaviour is largely determined by the characteristics of the entrepreneur, rather than that of the venture. It is also found that factors that trust, evident in the length of the relationship between the applicants and their primary lender, is important. Moderating these effects is further evidence that suggests the number of lenders and distance between lenders and applicants has a marked effect on online loan behaviour. Originality/value – This paper identifies the factors determining small business online loan application behaviour. This is important because the nature of online loan behaviour is changing the existing relationships between banks and customers. Whilst online loan applications afford banks the opportunity to substantially reduce costs, the danger is that long term relationships with customers are harder to cement.

Action learning: how learning transfers from entrepreneurs to small firms

The paper presents research with small and medium enterprise (SME) owners who have participated in a leadership development programme. The primary focus of the paper is on learning transfer and factors affecting it, arguing that entrepreneurs must engage in ‘action’ in order to ‘learn’ and that under certain conditions they may transfer learning to their firm. The paper draws on data from 19 focus groups undertaken from 2010 to 2012, involving 51 participants in the LEAD Wales programme. It considers the literatures exploring learning transfer and develops a conceptual framework, outlining four areas of focus for entrepreneurial learning. Utilising thematic analysis, it describes and evaluates what (actual facts and information) and how (techniques, styles of learning) participants transfer and what actions they take to improve the business and develop their people. The paper illustrates the complex mechanisms involved in this process and concludes that action learning is a method of facilitating entrepreneurial learning which is able to help address some of the problems of engagement, relevance and value that have been highlighted previously. The paper concludes that the efficacy of an entrepreneurial learning intervention in SMEs may depend on the effectiveness of learning transfer.