Despite the marked improvement in a number of credit spreads - including the TED spread, LIBOR-OIS spread, mortgage spreads, high-yield spreads and credit derivative indices - the credit situation for small businesses remains tight. The graph below shows the percentage indicating it was harder to obtain credit, as reported in the National Federation of Independent Business Optimism Survey, remains at crisis-type levels.

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Source: Gluskin, Sheff & Associates - Breakfast with Dave, December 9, 2009.

The dilemma of small businesses is also illustrated by data from DiscoverCard Small Business Watch, showing the proportion of small businesses that have experienced cash-flow problems over the past 90 days.

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Source: Chart of the Day, Clusterstock - The Business Insider, December 10, 2009.

Without a turnaround in the above, small businesses will not create jobs. And this is key to the overall economic recovery as small businesses are responsible for more than 60% of employment.