Labour market search and matching models are used frequently in business cycle literature to study labour market dynamics and improve our understanding of the dynamics of output and employment in an inter-temporal decision framework. At the same time, many argue that the most recent financial crisis and the subsequent Great Recession highlight the need for mainstream DSGE models to incorporate more realistic capital market features. A lot of literature is available on the work that has already been undertaken on the incorporation of financial market frictions into standard DSGE models. This literature has highlighted the importance of alternative capital market frictions for macroeconomic dynamics. Similarly to modelling labour market as a search and matching process, introducing endogenous search frictions in the credit markets has the potential of improving our understanding on the dynamic interaction between macroeconomy and capital markets.