These firms businesses with up to 200 employees employ 70 per cent of Australia’s labour force and contribute about 55 per cent to Australian businesses economic output.

They are also crucial generators of new ideas. ABS data shows small businesses alone carry out one third of research and development in high technology industries.

But small businesses did not recover as quickly as large businesses after the GFC. They witnessed a temporary respite in 2010, when long-run trading conditions returned, but since then they have deteriorated.

Part of the reason is smaller businesses are prevalent in the services and construction sectors, which have been particularly hard hit by the slump in new home approvals, a strong Australian dollar and consumers’ newfound thrift.

By contrast, large firms dominate Australia’s booming resource sector, where massive up-front costs naturally preclude smaller players.

However, difficulty in accessing capital is also a problem for smaller businesses. About 300,000 small businesses begin operation each year while a similar number cease to operate. Many small businesses exit the market because they cannot compete effectively with established firms.

But many, even those with viable business propositions, struggle because of a shortage of, or excessively costly or scarce, available funds.

Small businesses are less likely to have debt than larger businesses. According to the Australian Taxation Office, 40 per cent of small businesses had debt in 2010 while 60 per cent of larger companies did.

Although about 80 per cent of small businesses’ loan applications are accepted, they are more likely to be rejected than those of larger firms. The Reserve Bank concluded in May that tighter landing standards and reassessment of risk among Australia banks in the wake of the GFC has disproportionately affected small businesses.