The Equity-Financed Enterprise: Sharing Uncertainty to Support Investment
This essay takes a non-mainstream approach to small business finance and investment, with a particular focus on Europe. We advocate for banks to provide quasi-equity finance to support investment in uncertain environments. Quasi-equity, differently from debt, would absorb the downside for the entrepreneur and enable banks to profit from the upside that uncertainty creates. Combined with securitization, we see a possibility to enhance the role and profitability of the banking system, while at the same time launching a novel and potentially attractive asset class for investors.
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| Format: | Discussion Papers & Presentations biblioteca |
| Language: | English |
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Inter-American Development Bank
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| Subjects: | Equity Investing, Credit Risk, Non-Sovereign Guaranteed Credit Risk, Small Business Financing, Equity-Financed Enterprise;Investment;Credit;small business finance;small business investment, |
| Online Access: | http://dx.doi.org/10.18235/0000693 https://publications.iadb.org/en/equity-financed-enterprise-sharing-uncertainty-support-investment |
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