Vishny, and participants in the Junior Faculty lunch group at the University of Chicago, the Finance seminar at UCLA, and the NBER Summer Institute for usefi.d comments. Jayanta Sen and Alfi-ed Shang provided excellent research assistance. A preliminary study was supported by the World Bank. We gratefully acknowledge financial support from NSF grant #SBR-9423645. This paper is part of NBER's research programs in Corporate Finance and Economic Fluctuations and Growth. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research.

and the 1994 WFA meetings for comments. We are indebted to Eduardo Gonzales for excellent research assistance, and Andrew Alford for invaluable help in getting us acquainted with Global Vantage. This paper incorporates part of a C.R.S.P. working paper entitled "Notes on International Capital Structure". This paper is part of NBER's research program in Corporate Finance. Any opinions expressed are those of the authors and not those of the National Bureau of Economic Research.

This paper empirically examines how ties between a firm and its creditors affect the availability and cost of funds to the firm. We analyze data collected in a survey of small firms by the Small Business Administration. The primary benefit of building close ties with an institutional creditor is that the availability of financing increases. We find smaller effects on the price of credit. Attempts to widen the circle of relationships by borrowing from multiple lenders increases the price and reduces the availability of credit. In sum, relationships are valuable and appear to operate more through quantities rather than prices.