The number of commercial banks has fallen 68% since 1980.

Only 4,600 banks exist today.

Many smaller-sized banks have disappeared via mergers or failures, according to a report released by the federal Office of Advocacy at the SBA.

This federal agency is billed as an independent voice for small business but has long been criticized as a mouthpiece for big business through its regulatory power and policy recommendations.

This report, “Effects of Small Loans on Bank and Small Business Growth,” is yet another example of the agency’s big-business bias.

I serve as coordinator of Reform the SBA, a businessled campaign that includes changes to the Office of Advocacy. The report:

• Acknowledges the “importance of small loans for the success” of small businesses.

• Concludes that research results “provide evidence that small business loans… have a statistically and economically significant impact on small business employment growth and small business entry.”

• Estimates that doubling loans less than $100k is associated with increases in employment by 7% in 1 year.

• Recommends that policies “focused on small business loan availability should be given a high priority because small business loans have large and significant effects on employment growth and job creation.

• Sees the risks of relying on large banks to fill in for small banks in providing small business loans.

Large banks view small business loans as inherently riskier and requiring more monitoring.

Yet the Office of Advocacy’s solution for more small business loans is to rely on large banks.

Policies that encourage banks of all sizes - large ones in particular - to continue to supply small business loans is essential to meet small business financial needs.

These policies can be in the form of increasing financial incentives to banks to offer smaller loans such as extending the scope of small business loan guarantees.

But the Office of Advocacy’s solution to the problem is to do more of the same.

Mr. Knapp is CEO of the SC Small Business Chamber of Commerce.