Short Term Debt in Spanish Smes

Instituto Valenciano de Investigaciones Economicas Working Paper No. WP-EC 2004-12

26 Pages Posted: 7 May 2004

Date Written: April 2004


This paper analyses the debt maturity structure of the small and middle sized firms using the trade-off reward risk associated to the use of short-term loans. Therefore, a sample of 11.533 small and middle Spanish manufacturing firms from year 1997 through 2001 was used. The results of our study show that short-term loans are more frequent in firms with greater financial strength and greater financial flexibility, major growth options and when the interest cost differential between short-long term is more pronounced. Also, the firm size seems to have an influence on the level of short-term loans, it being higher in the smaller firms.

Keywords: SMEs, debt maturity, financial solvency, financial flexibility

JEL Classification: G3, G32

Suggested Citation

García-Teruel, Pedro J. and Martínez-Solano, Pedro, Short Term Debt in Spanish Smes (April 2004). Instituto Valenciano de Investigaciones Economicas Working Paper No. WP-EC 2004-12, Available at SSRN: or

Pedro J. García-Teruel (Contact Author)

University of Murcia ( email )

Department of Management and Finance
Murcia, 30100
34 868887828 (Phone)
34 868887537 (Fax)


Pedro Martínez-Solano

University of Murcia ( email )

Dpt. Management and Finance
Murcia, Murcia 30100
34 868 883 747 (Phone)
34 868 887 537 (Fax)


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