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Debt Costs Determinants in Small Enterprise

The cost of debt for small enterprises is higher than for other enterprises. The article explains why the cost of debt for small business is higher than for other firms. It is a result of specific characteristics of small enterprises. First of all, the small enterprises are more risky than other firms. Next, in small enterprises, agency costs and information asymetry are different than in other firms. All of them cause, the growing of the cost of debt for small enterprises.