article Angus Loten

Last month, the National Federation of Independent Business, a Washington-based lobby group, reported a slight decline in borrowing among small businesses. It says the downturn could reflect tougher lending conditions, though only 2 percent of 1,800 small-business owners recently surveyed cited the availability of credit as a top concern, compared to 37 percent in 1982.

"Undoubtedly, some small businesses borrowed from branches of Wall Street banks now short of capital to lend," William Dunkelberg, the group's chief economist, said in a statement.

Sen. John Kerry (D-Mass.), the chairman of the Senate Committee on Small Business and Entrepreneurship, said the Federal Reserve report underscores the need to temporarily reduce fees on government-backed small-business loans.

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