Allison O'Neill founded Bundle, an infant and toddler clothing store in New York City, in 2008. She is one of many entrepreneurs who have faced challenges securing small business loans in recent years.
"I had great credit," O'Neill told the Federal Reserve Bank of New York, as part of a survey of small business borrowers. "I had basically four times the amount of a loan I was looking for, in my brokerage account, and they didn't care. They were just like, we're not taking any risks on startups."
In this so-called economic recovery, it has gotten harder for small businesses like O'Neill's to get loans. The number of U.S. small business loans, defined as $1 million or less, declined 5 percent last year, according to a study by the Small Business Administration released in July. The dollar amount of small business loans declined 7 percent.
Moreover, the economic downturn has crushed the dreams of many entrepreneurs. More than 170,000 small businesses in the U.S. shut down between 2008 and 2010, according to a recent analysis of U.S. Census Bureau data. Many others simply couldn't get the financing to start up in the first place.