Insights into the world of small business lending and development
Small Business Not Getting Credit Where It's Due
Over the past 5 years, nominal (not real) GDP grew 20 percent; not great, but positive. However, over the same period, government debt grew over 30 percent, indicating that government is taking a larger share of available funds in the economy. Corporate credit also grew over 30 percent while credit to households and small businesses grew by less than 10 percent (Flow of Funds, Federal Reserve). This suggests that the bulk of credit available has been allocated to governments and large corporations, not to the small business sector, the engine of growth.