Abstract
This article considers the longevity of the criticism that the financial system in Britain has failed to provide adequate funding to small or fast-growing companies. It considers, first, some of the advantages which an economy might gain from having a vibrant and healthy small firms sector. It then discusses the financing difficulties faced by small firms and some of the attempts which have been undertaken to ‘solve’ these problems. The paper suggests that the size of the unsatisfied fringe of creditworthy borrowers in Britain has been consistently over-estimated, since none of the ameliorative measures have displayed significant success. Small firms may require additional financial provision, but this has to be justified by recourse to social welfare and externalities, rather than financial efficiency, arguments.