Access to credit is crucial to small companies, and President Obama is banking that increased lending to entrepreneurs will spur the creation of small businesses and the resulting increases in hiring, and capital expenditures.

Early in 2011, the Obama Administration introduced Startup America, an initiative to inspire and accelerate entrepreneurship throughout the country. Its stated goals are to promote entrepreneurship; increase the number of new firms creating economic growth, innovation and quality jobs; and inspire and empower greater diversity of communities and individuals to build great American companies. The initiative sought to expand access to capital, support mentorship programs, and strengthen commercialization of the $148 billion in annual federally - funded research and development. So far, Startup America has created a lot of buzz, but not much else.

The President pushed hard for the passage of the Small Business Jobs Act, which created a $30 billion lending pool from which smaller banks could draw upon and lend to startups and other expanding businesses. Thus far, the Small Business Lending Fund has produced mixed results, partly because some small banks feel that there is a TARP-like stigma attached to participating in the fund and because they fear the regulations that came attached to the TARP funding two years ago.

However, there are signs that the credit markets for small businesses is loosening. Smaller lenders, such as community banks, credit unions and non-profit financial institutions, are still the drivers in startup lending. They are less stringent in their lending parameters, know the local communities in which they operate, and generally more willing to give a local startup a chance. Because of the advantage of the Internet, they can make loans not only in their local areas but also across the country. Biz2Credit frequently connects borrowers in one state with lending institutions in another – sometimes on the opposite coasts of the United States.

Big banks also are opening up the purse strings, but their actions have yet to match their press releases. Many large financial institutions have announced with much fanfare that they planned to add staff to service the small business community. However, if you ask small business owners, they often will tell you that the bigger institutions are harder to deal with and that they receive better service and more funding from the smaller lenders – sometimes at more attractive lending rates.

The little guys are beating the big guys in the small business lending arena because of both their flexibility and their use of technology to help automate the transactions and increase the ease of the process.

For their part, successful small businesses are leveraging technology to compete more effectively in the marketplace.

Many small firms have learned to use tools such as eBay, Facebook, Twitter and YouTube in their marketing efforts. They realize that they don’t have to spend a lot of money on expensive advertising campaigns that might not hit their target audiences. Rather, entrepreneurs are working with p.r. firms that specialize in social media and other forms of digital marketing. A smart, strategic p.r. campaign can cost a lot less money than an ad campaign and frequently produces credibility that startups need when favorable reviews of their businesses appear online and in the traditional media.

Unfortunately, there are still thousands of small business owners who have not yet embraced these tremendous marketing tools. Some still do not even have web sites or Internet access. Ignoring the benefits of utilizing technology needlessly puts smaller companies in a competitive disadvantage. Small business owners – particularly those who have been downsized from big corporations and decide to go into business for themselves – must not be intimidated by technology; they must embrace it. They must either train to learn how to utilize it better or hire people who do know how to take advantage of these innovations that help business compete more efficiently.

Small business owners can better implement the power of technology in their financial management. Budding entrepreneurs are increasingly going online in search of the best deals on small business loans, in much the same way that consumers embraced eCommerce sites such as Amazon. Founders of startups now look for capital on the web through companies like Biz2Credit, which also offers comprehensive financial management services. Small business owners can now essentially farm out their CFO duties, thus making their companies leaner and freeing their founders to focus on developing new product offerings, sales and customer relations — the things that they are good at doing.

For instance, New Jersey-based Vista Pharmaceuticals, founded by a group of doctors to manufacture and market bulk over-the-counter and prescription drugs and nutraceutical products, received FDA approval to ship bulk drugs to the U.S. market from its manufacturing plant in India. The firm needed working capital to recruit U.S. marketing staff as well as set up the infrastructure needed to handle all the sales calls. Vista's founder, Dr. Dhananjaya Alli, did not have a lot of experience in American corporate finance. He approached Biz2Credit to help raise debt financing — a challenge since his company lacked a U.S. revenue stream, which made banks hesitant to provide financing. Vista was able to amortize $2 million in R&D expenses over five years and got an industry valuation for the FDA license. By taking these steps, the company became eligible for a $575,000 SBA 7(a) loan at a low interest rate of six percent and has created five jobs.

Innovation is key to small businesses growth. If we are to fully recover from the Great Recession, small businesses must help lead the way by leveraging technology and competing more efficiently in the global marketplace.

The author is CEO of Biz2Credit