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4.3. Funding the New Idea 
The funding of the new idea is the key element for the 
establishment of companies. Without capital, the enterprises 
cannot survive and cannot ensure their growth. A major issue 
in this part of the analysis has to do with the sources of 
funding. The success rates of banking loans –that is, the 
number of the approved loans by the total number of loan 

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International Journal of Economic Behavior and Organization 2017; 5(2): 36-53 
44 
requests- have been decreased during the crisis (Bamps and 
Schmiemann, 2012) as most of the banks, in periods of 
recession, are decreasing their loans provision.
4.3.1. Funding from Banks 
The Bank loans are now the most common way in which 
businesses resort to find financing. Banks offer two broad 
categories of loans to firms: The working capital loans and 
long-term loans. 
I. Commercial loans. Banks offer complete packages to 
meet SME liquidity needs. Such products are open or 
revolving loans and overdrafts. By open loans banks give a 
credit line to their client as that can be borrowed. The 
borrower can if he wants to pay part or all of the debt and 
may be refinanced when in need as the limit has been 
reached, without the need to return to this period the capital 
employed. There are banks that finance working capital as 
much as 100% of the company's turnover and other where 
this figure does not exceed 50% of the turnover (Padmalatha 
and Justin, 2010).
II. Property loans (Casu et al., 2006) 
The commercial loans can finance up to 100% of the value 
of the property and their duration ranges from 3 to 30 years 
depending on the bank and the client, with interest rates 
usually variable, but in some cases, they can have fixed 
interest rate. For young entrepreneurs banks usually provide 
a grace period of up to two years, during which young 
entrepreneurs are required to pay only the interest or smaller 
payments. 
III. Loans for purchase of fixed assets (Casu et al., 2006) 
Loans of this kind are granted for the purchase of fixed 
equipment (furniture, machines, etc.). The repayment period 
of these loans reaches 15 years at an interest rate which is 
usually variable. The funding will cover the entire market 
investment of the fixed assets and disbursement can be either 
single or gradually depending on market trends. 
One of the biggest problems faced by Greek companies is 
the liquidity provided by banks. From the beginning of the 
crisis to date, loans to companies have shrunk mainly due to 
two reasons: 1) The lack of bank access to the interbank 
market and 2) The increase in non-performing loans and 
credit risk 
In addition to the practical difficulty of bank loans, it 
should be noted that most of the times, for business loans 
there is a requirement of collaterals, which makes it difficult t 
for businesses to borrow in order to buy the necessary 
equipment and infrastructure. The level of the guarantees 
banks require in order to provide a loan has increased during 
the crisis, making even more difficult for enterprises to ask 
for a loan (Bamps and Schmiemann, 2012).