Changes

</onlyinclude>

In the wake of the recession, the loaning environment to small business has changed. This is a result of a few major factors, both on the loaning side (banks) and the receiving one. Starting with the businesses, small businesses were hit disproportionately hard in the recession. A series of studies conducted by the Harvard Business School showed that small business accounted for 60% for job losses and experienced an 11% decrease in total employment. This second figure lies almost twice as high as the total loss for large firms, 7%. Moreover, businesses with fewer than 50 employees realized 14% losses of employment. A study done by the New York Fed corroborates these findings. The NY Fed study actually adds to them, as well. The researchers in this study also conducted a survey, and found that most small business owners indicated that the lack in sales and commercial activity primarily sparked the decline in employment.

Since the recession, small businesses have been notably slower to recover. Especially since 2009, larger businesses have posted higher growth rates in sales, inventories, and fixed assets. Actually, small businesses have seen their fixed asset growth go negative for the first time since 2006. All things considered, slower sales, inventories, and investment culminated in sluggish recovery for small businesses. By extension, banks have been wary of spurious loans, especially to small business, as their credit ratings have been adversely affected in recent years.

Despite the significant credit rating deduction incurred by the recession, small businesses have been able to find loans from alternative sources. Traditionally, smaller banks have catered to small businesses unable to qualify for loans from institutional investors, or bigger banks. In 2010, small and community banks accounted for 48.1% of all small business bank loans, according to the Mercatus Center at George Mason University. Consequently, small businesses have a vested interest in the well-being of their community banks. Unfortunately for small business, these community banks are disappearing at alarming rates.