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This paper provides a model where entrepreneurs can ...nance random investment opportunities using trade credit, bank-issued assets, or money. They look for loans in an over-the-counter market where the terms of the contract, including loan size, interest rate, and down payment, are negotiated subject to pledgeability constraints. The model has implications for the cross-sectional distribution of corporate loan rates and sizes, interest rate pass through, and the transmission of monetarydoi:10.1257/aer.20161048 fatcat:ukm5xuwqaveftehjngto2ywviu