Bank Credit and Trade Credit under the COVID Crisis: A Comparison of the High-Technology and Low-Technology SMEs in Portugal

This study mainly investigates the relationship between bank credit and trade credit separately for high-technology and low-technology small and medium-sized enterprises (SMEs) in Portugal with considering the impacts of the COVID crisis. The research results show obvious difference about the relationship between granting trade credit and obtaining bank credit between high-technology and low-technology SMEs. Regarding receiving trade credit and obtaining bank credit, the findings support an independent relationship when considering whether obtaining bank credit or not and a substitute relationship when considering the amount of bank credit. The substitute effect of receiving trade credit on obtaining bank credit reflects the existence of restrictions of bank credit for SMEs; the negative influence of the COVID crisis exacerbates the financial situations and causes strongly substitute effect on low-technology SMEs during and after the crisis. Therefore, the findings yielded enrich the research on externally financing behaviour of SMEs with different technology features from the perspective of bank credit and trade credit.