Abstract
This paper investigates two aspects of the demand side determinants of bank lending for a sample of Australian SMEs. Using data from the Growing Australian Business Survey we document the results on why a sample of Australian SMEs seek bank finance and bank credit rationing of loan applications. SMEs with growth intentions, business plans, larger firms and those in the agriculture industry are significantly more likely to seek finance. A significant interaction between business plans and size is also found. Firms that are older, in agriculture, with incremental product innovation, have 40% or more of export sales, and have a male CEO have a positive relation with loan application success. Generally, these factors are not significant in the decision to seek bank finance. Having business plans is not significantly related to the level of success in securing debt funds nor is the interaction between business plans and size.
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