Small-business financing after the financial crisis – lessons from the literature

Purpose The purpose of this paper is to examine the status of small-business lending following the recession. Design/methodology/approach The authors survey the literature and analyze recent surveys of small-business lending. Findings The results reinforce the importance of owner equity as a primary source of small-business financing. In addition, the authors find that small firms have been seeking and obtaining less capital since the 2008 financial crisis. Research limitations/implications The findings about the main sources of small-business financing will be informative when formulating financial regulation. Social implications The available evidence suggests that new regulation of the financial services industry may be restricting access to products that small-business owners rely on and may adversely affect small banks. Originality/value The authors offer the most recent analysis of small-business financing, focusing on changes that may have been caused by the recession and major financial regulations.