Small Business Credit Squeeze Caused by Multitude of Factors, Says Cleveland Fed Study

Small business lending has declined substantially since the Great Recession, and a multitude of factors are contributing to the credit squeeze, according to Federal Reserve Bank of Cleveland policy analyst Ann Marie Wiersch and visiting scholar Scott Shane, a professor of entrepreneurial studies at Case Western Reserve University.

According to the researchers:

Wiersch and Shane say this confluence of events makes it unlikely that small business credit will spontaneously increase anytime soon. Given the contribution that small businesses make to employment and economic activity, they suggest policymakers may want to intervene to ensure that small business owners can access the credit they need. But the researchers caution that any proposed solution needs to take into account all of the factors affecting small business credit.

For a brief overview of their study, see Still Squeezed: Small Business Lending.

For more detail, read Why Small Business Lending Isn’t What It Used to Be.

And be sure to check out our other recent research.