SMALL BUSINESS FINANCE

The United States Small Business Administration (SBA) estimates that, as of 2003, there were approximately 23.7 million small businesses in the United States. The SBA defines a small business as "an independent business having fewer than 500 employees." Small businesses represent over 99 percent of all employers, and they employ more than half of all private sector employees. Moreover, small businesses employ about 40 percent of all high-tech personnel such as scientists, computer workers and engineers. These firms create anywhere from 60 percent to 80 percent of net new jobs each year, and they represent 97 percent of all exporters of goods. Small business create more than 50 percent of the private gross domestic product, and they pay about 45 percent of the total United States private payroll.

Clearly, small businesses play an important role in our business economy. It is important to note, however,...