In honor of the Fourth of July holiday, let’s consider what it takes for small business – the real backbone of the national economy – to be truly independent.

Independence comes with access to capital. Small-business owners need capital to expand, to create jobs, to create new businesses.

However, community banks – traditionally a primary source of funding for small businesses – aren’t making loans like they did just a few years ago. In the heady prerecession days, banks threw barrels of money at anyone who showed up with a halfway decent business idea.

Those days are long gone. Bankers have tightened their lending standards, although they blame federal regulators for the credit crunch. In the wake of the financial crisis, regulators have come down hard on banks for taking too many risks. Regulators have ordered several East Tennessee banks to increase earnings, improve their loan portfolios, and take other steps to get out of the federal doghouse.

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