@techreport{NBERh0137,
 title = "Short-Term Loans and Long-Term Relationships: Relationship Lending in Early America",
 author = "Howard Bodenhorn",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Historical Working Paper Series",
 number = "137",
 year = "2001",
 month = "December",
 URL = "http://www.nber.org/papers/h0137",
 abstract = {Recent banking theory holds that durable firm-bank relationships are valuable to both parties.  Using contract-specific loan records of a nineteenth-century U.S. bank, this paper shows that firms that form extended relationships with banks receive three principal benefits.  First, firms with extended relationships face lower credit costs.  As the bank-borrower relationship matures credit costs decline.  Second, long-term customers are asked to provide fewer personal guarantees.  Third-party guarantees are an efficient alternative to collateral in certain circumstances, and long-term clients are asked to provide fewer guarantees.  Third, long-term bank customers more likely to have loan terms renegotiated during a credit crunch.  Firms without access to public debt markets rely on bank credit, and continued access during a credit crunch is important for small, informationally opaque firms.},
}