Ask your average banker about lending to small business and praise of the sector will flow from his mouth like honey. Ask him to define small business and figures like $100 million in sales will escape into the ether, the high cutoff point attributed to credit quality.

The reason? Objective standards for measuring credit risk in loans to real small businesses-those with fewer than 100 employees and scant millions in annual sales-have been scarce. The result: Loans with wider spreads, virtually guaranteeing fewer businesses that can afford them.

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