Peón Pose, DavidGuntín Araújo, Xulia2021-08-112021-08-112021Journal of Business Economics and Management 2021, 22(3): 616-635. https://doi.org/10.3846/jbem.2021.142701611-1699http://hdl.handle.net/10347/26775Access to external finance is a key challenge for the creation, survival and growth of SMEs. This article delves into the “weak funding” handicap of rural small firms (SEs): the access to bank financing and the substitutive role of trade credit for entrepreneurs in rural areas when they faced bank credit constraints. Considering SEs in Galicia (Spain), a paradigmatic case in Europe of rural areas in demographic decline with a strong impact of the Spanish sovereign and banking crisis of 2008–2012. There’s evidence of firms in rural areas facing a differential negative flow of bank credit during the financial crisis, especially in the manufacturing and construction sectors, that dissipated afterwards. Then, using a panel data approach that considers the determinants of trade credit, the complementary and substitutive hypotheses are tested to estimate the impact of bank credit restrictions over trade creditengCopyright © 2021 The Author(s). Published by Vilnius Gediminas Technical University This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons. org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are creditedAtribución 4.0 Internacionalhttp://creativecommons.org/licenses/by/4.0/Trade creditBank credit constraintsRural developmentSMESEEntrepreneurjournal article10.3846/jbem.2021.142702029-4433open access