Banking and SME Financing in the
Charles Ou, Ph.D.
Office of Economic Research
U.S. Small Business Administration
Release Date: June 2006
This paper was originally presented at the conference on “International Comparisons in
the Financing of SMEs in Developed Nations” at the Warwick School of Business,
University of Warwick, Coventry, UK, April 4-5, 2006. The statements, findings,
conclusions, and recommendations found in this study are those of the authors and do not
necessarily reflect the views of the Office of Advocacy, the United States Small Business
Administration, or the United States Government.
Banking and SME Financing in the United States
A Working Paper by Charles Ou, Ph.D.,
Office of Economic Research, Office of Advocacy, June 2006. 38 pages.
This Small Business Research Summary summarizes one of a series of research papers prepared by the U.S. Small Business Adminis-
tration’s Office of Advocacy or its research contractors. The opinions and recommendations of the authors of this study do not necessarily
reflect official policies of the SBA or other agencies of the U.S. government. For more information, visit the Office of Advocacy’s Internet
site at www.sba.gov/advo.
Commercial banks have been the leading supplier of
debt capital to small firms in the United States. With
the increasing availability of small business lending
statistics and of research on the topic, it becomes
possible to provide an overview of the small busi-
ness loan markets in the United States, as well as an
evaluation of the impact of major developments on
the cost and availability of loans to small businesses.
The paper begins with a brief discussion of the
market—the borrowers, lenders, and market orga-
nization—followed by a discussion of major devel-
opments in U.S. financial markets and the banking
industry. Topics discussed include innovations in
information technology and in financial m