The finding that both smaller and younger firms have their loan applications denied more frequently is consistent with the  2  BIS Review 129/2007  conventional view that these firms are riskier, have shorter credit histories or less collateral to pledge as security, and are generally harder for lenders to evaluate because they are less transparent.
Because banks are the leading source of traditional credit to small business, much attention has been paid to developments in banking that may influence credit availability. The substantial consolidation of the banking industry over the past twenty years is one such development.