Loan Pricing of City Commercial Banks for Small Enterprises Based on Relationship-Lending

There exists one kind of natural and accrete relationship between city commercial banks and small enterprises. How to establish a sound small business loan pricing mechanism has become a crucial problem confronting city commercial bank. This paper extends research on a commercial bank's status quo in pricing its small business loans. The result indicates that this bank mainly emphasizes on risk when pricing small business loans without considering the relationship factor. At last, we propose relationship-lending as the guiding idea for city commercial bank in granting loans to small business, and construct a corresponding relationship lending-based pricing method.