changes in one ’ s own circumstances. responses regarding attitudes toward modifying spending as asset values rise and fall suggest that the relationship between the saving rate and household wealth might be even more persistent than in the past. such an impact would be further magnified if changes in wealth also impacted borrowing patterns and credit approval. to look at credit indicators, i decided to focus on business owners in order to examine the impact of changes in wealth on access to business as well as consumer credit. business owners the preretirement and business owner groups i have chosen are not mutually exclusive. indeed, there is quite a bit of overlap. more than 30 percent of small business owners in 2007 were part of the preretirement group, and they tended to be among the wealthier members of that group. in fact, the business owner group held nearly half of all household wealth in 2007. small businesses employ roughly half of private - sector workers, they fill critical niches throughout the economy, and they are often seen as sources of innovation. for many, the ability to leverage personal assets is a critical factor in developing their businesses. concern over credit availability for small businesses has appropriately been a recurring worry throughout the crisis, but information about the intersection between business performance, personal finances, and credit has been hard to find. while the data are still not definitive, the panel survey allows us to look at supply, demand, and assessment of creditworthiness from the borrowers ’ point of view. although the scf is focused on families, not businesses, it does collect substantial information on the closely held businesses families own. the survey clearly shows a high degree of interdependence of personal and business finances for many families with businesses. for example, families make loan guarantees for their businesses using personal assets as collateral, and loans between business owners and their businesses are common in both directions. according to the most recently available data from the census bureau ’ s survey of business owners, 6 in 10 small business owners use personal savings or assets to finance or expand their businesses. the spread of gains and losses from 2007 to 2009 was sharper for business owners than for the population overall ( figure 10 ). fifty - seven percent of business owners saw substantial losses in their net worth relative to their usual income, compared with 43 percent of the overall population ; but the percentage of business owners who saw large wealth gains relative to their income was also larger than for the overall population. the industry in which the business operated had a significant impact on

whether the business owner gained or lost wealth. families with businesses primarily engaged in mining or construction – among small businesses in the survey, this was overwhelmingly construction - related businesses – were the most likely to see a substantial decline in net worth ( figure 11 ). in contrast, families with a wholesale or retail business were more likely to see a substantial gain. those involved in utilities, transportation, and services – in the survey, this was predominantly services – saw the largest gains and the largest losses, but losses exceeded gains for the group. only 82 percent of the consumers who reported owning a business in 2007 also reported owning a business in 2009. and some of those who remained business owners may have scaled back their operations while awaiting recovery. we do not have the detail necessary to assess the importance of reduced operations directly, but we have some suggestive bis central bankers ’ speeches evidence. for businesses that were in operation in both 2007 and 2009, we see decreased median and mean business incomes for owners who saw their wealth fall and the reverse for owners whose wealth rose. some of the decrease in activity may be driven by a decline in demand for services, but some may come from credit constraints. for a variety of reasons, we cannot look directly at changes in credit availability for business owners and their businesses, but we can look at two indicators for the owners who had a continuing business in 2009. some business owners use proceeds from personal loans for business purposes or use personal assets to secure business loans. in other cases, the business itself may apply on its own. if the business is a sole proprietorship, there is no legal distinction between business and personal borrowing, but business owners still may view their personal and business debt separately. the 2009 scf panel interview asked participants to report separately whether they had applied for personal and business loans during the two - year period. if they had, it asked whether they had been turned down for a loan. the survey also asked whether they had wanted to borrow for personal or business purposes but had been so convinced they would be turned down that they did not apply. the data show a substantial level of personal and business applications both for owners whose wealth rose and for those whose wealth fell over the period of the scf panel. the level of personal applications was slightly higher for those whose wealth increased over the period, and their applications were more likely to have been approved ( or they were less likely to have believed they would have been denied ) ( figure 12 ). the pattern of personal loan denial