The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle

ArXiv ID: ssrn-119288 “View on arXiv”

Authors: Unknown

Abstract

This article analyzes the economics of small business finance and the private equity and debt markets in which these businesses raise funds. The framework used

Keywords: Small Business Finance, Private Equity, Private Debt, Capital Structure, Firm Valuation

Complexity vs Empirical Score

• Math Complexity: 3.5/10
• Empirical Rigor: 3.0/10
• Quadrant: Philosophers
• Why: The paper focuses on conceptual economic frameworks for small business finance without heavy mathematical derivations or detailed empirical backtesting data, aligning more with theoretical analysis.

  flowchart TD
    RQ["Research Question:<br>How do private equity & debt markets<br>affect small business finance & capital structure?"] --> D["Data Inputs:<br>Small business financial data<br>& market transaction records"]
    D --> M["Methodology:<br>Valuation models &<br>capital structure analysis"]
    M --> C["Computational Processes:<br>Regression analysis &<br>firm valuation metrics"]
    C --> F1["Key Finding 1:<br>Debt markets provide<br>structured financing"]
    C --> F2["Key Finding 2:<br>Private equity enables<br>growth capital access"]
    C --> F3["Key Finding 3:<br>Optimal capital structure<br>depends on firm size & stage"]