Small banks, a big source of funding for small businesses, continue to struggle, so they are lending less and keeping credit conditions tight, which in turn is hindering growth and hiring at small firms, writes William Alden. In turn, struggling small businesses are reluctant to borrow as the economic downturn continues to weigh on sales, which deprives small banks of a key source of revenue. This vicious cycle of co-dependence is hurting the economic recovery as a whole, Alden wrote.

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