Bank Consolidation Bad For Small Biz?

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els of small businesses. The authors found that bank consolidation resulted in significant reductions in credit limits for small businesses, but that actual credit balances had fallen by much less.

The banking industry has been undergoing an extensive period of consolidation, which has accelerated since the federal interstate banking legislation of 1994. Small firms are the source of three quarters of the net new jobs and the bulk of their financing is from banks. Consequently, the effect of institutional change on small business credit is a major economic and job creation issue.

The Office of Advocacy, the ?small business watchdog? of the government, was created by Congress in 1976. As part of the SBA, the Office of Advocacy examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information and a complete copy of the report, go to: For more information on the Office of Advocacy, visit, or call (202) 205-6533

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