These businesses represent a potential market for financial institutions and other funders, but first may need technical assistance such as management or loan packaging assistance. There are important reasons to focus on the needs of small businesses. According to the California Trade and Commerce Agency, half of all employment in California is by small businesses and, over the last several years, more new jobs were created in small businesses than in large businesses. The Agency reports that in 1997, more than 6.9 million workers were employed in business establishments with fewer than 100 workers. To say small businesses drive America's economic engine underestimates their impact, because they affect American life not only in the aggregate, but also in personal, local, and sociological ways.
Small businesses sustain the families of their owners and the neighborhoods in which they reside.
When small businesses succeed, they bring services and employment to their locales. When they fail, the impact jars their local economies. Unfortunately, statistics show that small businesses fail at a faster rate than larger businesses. California's smallest enterprises exhibit the same needs as larger ones, often with greater intensity and less power to resolve problems. Small businesses require capital, management support, mentoring and guidance, community-oriented financing options, and the power conferred by peer associations.