Symposium on Access to CapitalSeptember 20, 2011
Last week, the U.S. Small Business Administration (SBA) Office of Advocacy (Advocacy) held a symposium, “The Small Business Capital Crunch: Debt and Equity” in conjunction with NSBA’s annual event, the Washington Presentation. Several NSBA members attended the event—at which NSBA Past Chair Marilyn Landis was a featured speaker—which provided a rousing discussion on small-business access to capital.
Held at the Capitol Hill Visitors Center, the symposium was moderated by Dr. Winslow Sargeant, the Chief Counsel for Advocacy, who was joined by CNN journalist Roland S. Martin as the key-note speaker. Following Martin’s presentation, the symposium offered two panel discussions: one on bank lending issues and the other on equity—both of which focused on how to improve small-business access.
The first panel featured Marilyn Landis of NSBA and Basic Business Concepts, Inc., Traci Mach of the Federal Reserve Board of Governors and James Chessen of the American Bankers Association, and addressed how to fix the bank lending crunch for small businesses. The second panel focused on equity and featured Daphne Dufresne of RLJ Equity Partners, Mark G. Heesen from the National Venture Capital Association and David T. Robinson, a professor at Duke University, who all spoke to the challenges small businesses have with equity.
Throughout the afternoon, speakers and attendees discussed the current climate of financial markets for small businesses, and underscored the gap between supply and demand for bank loans. Panelists also discussed various financing methods available to small businesses, and which of those work best, and which need revamped. Additionally, there was a good deal of discussion about start-up capital and equity capital, and the need to find new solutions to get capital into the hands of small businesses that want and need it.
The day prior to the symposium, Advocacy released three reports on small business financing. The first, the Frequently Asked Questions about Small Business Finance, looks at both the debt and equity aspects of the small business balance sheet and provides data about where small businesses obtain their financing. The second report, “Bank Liquidity Pressures and the Availability of Bank Credit to Small Firms: Was the 2007-2009 Credit Crisis Different?” addresses how the most recent crisis was different and how liquidity played a significant role. Finally, the third report, “The Growing Impact of Credit Unions on Small Business Lending” takes a look data for banks and credit unions from 1986 to 2010 and finds that, even during the financial crisis, credit unions may have provided some extra business lending in response to reductions in business lending by banks.