Cultural Consensus in Lending to Knowledge-Based Businesses

Previous research reveals a consistent culture of lending by financial institutions when conventional business proposals are evaluated. Consistency may not be displayed for proposals based on knowledge-based business (KBB) with weak collateral and track record. In addressing this gap it is difficult...

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Bibliographic Details
Published inJournal of business diversity Vol. 12; no. 3; p. 26
Main Authors Gorman, Gary, Rosa, Peter J, Faseruk, Alex
Format Journal Article
LanguageEnglish
Published West Palm Beach North American Business Press 01.11.2012
Subjects
Banks
Business plans
Collateral
Commercial banks
Commercial credit
Criteria
Culture
Decision making
Entrepreneurs
Financial institutions
Government agencies
Knowledge
Lending institutions
Loan approval procedures
Proposals
Relationship banking
Specialty products
Studies
Canada
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Summary:Previous research reveals a consistent culture of lending by financial institutions when conventional business proposals are evaluated. Consistency may not be displayed for proposals based on knowledge-based business (KBB) with weak collateral and track record. In addressing this gap it is difficult to conceptualize and measure culture across diverse financial lending institutions. Consensus analysis was employed to research the nature of consensus across institutions in Eastern Canada. Respondents were asked to review two-stage conventional and KBB proposals. A high level of consensus was observed for all account managers from diverse institutions when considering a traditional proposal, but divergent trends emerged when considering the KBB proposal. KBB specialists exhibit high consensus with each other but differ sharply from the culture of other account managers. Results should interest entrepreneurs, finance researchers and policymakers. [PUBLICATION ABSTRAACT]
ISSN:2158-3889