Our contributions in this paper are twofold. In the first place, we build original financial restriction measures of 8,071 private firms in Brazil. We use these measures to have an idea of their level of financial restrictions from 2012 to 2020. To build these measures, we use microdata of 3,469,135 loan contracts written between these firms and financial institutions in this period. In the second place, we estimate, using our financial restriction measures, investment demand of these firms and verify if credit policies of the Banco Central do Brasil during the Covid-19 pandemic had any positive effect in mitigating their credit restrictions. Our results show that our financial restriction measures explain well the access of Brazilian private firms to credit for investment as well as indicate that their investment is negatively related to financial restrictions in Brazil. Furthermore, they also show that credit policies of Banco Central do Brasil had positive effect on working capital loans of private firms but did not have any effect on their investment in the Covid-19 pandemic period.
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