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It is expected that the large majority of the help will be through the provision of debt financing but other options include hybrid convertible debt or a minority equity stake of up to 25%.
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The Cruickshank Commission of UK highlighted that intervention of the government in the past meant to stimulate the provision of debt finances had been misdirected.
Indeed, access of debt financing is very limited especially for SMEs due to the requirements for the provision of debt (Deakins, 2008).
Higher interest rates increase the cost of debt financing.
Banks are like the supermarket of debt financing.
They find that the deduction restrictions often, but not always reduce the benefit of debt financing.
In this paper, a quantitative research is conducted to disclose the robustness of debt financing system and its strategy.
Nevertheless, the choice between the two main sources of short-term financing (bank debt and accounts payable) may be determined by the existence of financial constraints in other sources of debt financing, as suggested by the previous descriptive analyses.
The choice of debt financing is largely affected by the accessibility of bank loans (Wu and Yue, 2009).
To combat the excessive use of debt financing, many countries recently introduced new interest deductibility restrictions (see e.g., Webber 2010).
Founded by Wade Eyerly, Surf Air has attracted $17.3 million of equity and $65 million worth of debt financing.
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