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The bank lending channel theory posits that during monetary contractions banks restrict some firms' loans, thus reducing their desired investment independently of interest rates. Previous research finds small firms reduce, while large firms accelerate, loan growth. We find that small firms increase trade credit, a substitute credit, indicating a strong loan demand. It supports the bank lending channel: they do not voluntarily cut bank loans since they increase a less-desirable alternative. Using trade credit is propitious since unlike commercial paper (investigated by previous researchers), it is widely used by the small firms suffering the loan decline. Surprisingly, we also find large firms increase trade credit, a puzzle since they are typically assumed to have wide access to other credit. Using individual firm data, we find the reasons large firms use trade credit are financial in nature: those without a bond rating increase trade credit (i.e. without access to open market credit). As relatively few firms have this mark of quality, it implies that more firms are affected by credit constraints than previously believed.

The basic financial purpose of an enterprise is maximization of its value. Trade credit management should also contribute to realization of this fundamental aim. Many of the current asset management models that are found in financial management literature assume book profit maximization as the basic financial purpose. These book profit-based models could be lacking in what relates to maximization of enterprise value. The enterprise value maximization strategy is executed with a focus on risk & uncertainty. This article presents the consequences that can result from operating risk that is related to purchasers using payment postponement for goods &/or services. The present article offers a method that uses portfolio management theory to determine the level of accounts receivable in a firm. Figures, References. Adapted from the source document.

Abstract
The presence of different risk factors in international trade gives evidence of the necessity of support in gaps that may affect exporters' activity. To maximize the trade volumes and in the same time to minimize the exporters' risks the stakeholders use trade credit insurance. The paper provides analysis of conceptual background of the trade credit insurance in the world. We analyzed briefly the problems, arising in insurance markets due to asymmetric information, such as adverse selection and moral hazard. Also we discuss the main stages of development of trade credit insurance in countries worldwide. Using comparative and graphical analysis we provide a brief evaluation of the dynamics of claims and recoveries for different forms of trade credit insurance. We found that the claims related to the commercial risk for medium and long trade credits in recent years exceed the recoveries, while with the political risk the reverse trend holds. And we originally consider these findings in terms of information asymmetry in the trade credit insurance differentiated by type of risk.

AbstractThe presence of different risk factors in international trade gives evidence of the necessity of support in gaps that may affect exporters' activity. To maximize the trade volumes and in the same time to minimize the exporters' risks the stakeholders use trade credit insurance. The paper provides analysis of conceptual background of the trade credit insurance in the world. We analyzed briefly the problems, arising in insurance markets due to asymmetric information, such as adverse selection and moral hazard. Also we discuss the main stages of development of trade credit insurance in countries worldwide. Using comparative and graphical analysis we provide a brief evaluation of the dynamics of claims and recoveries for different forms of trade credit insurance. We found that the claims related to the commercial risk for medium and long trade credits in recent years exceed the recoveries, while with the political risk the reverse trend holds. And we originally consider these findings in terms of information asymmetry in the trade credit insurance differentiated by type of risk.