The paper examines the increasing distance between small firms and their lenders in the United States, both in terms of physical distance and communication methods. The authors document that the average distance between small firms and their lenders has increased significantly over time, from 51 miles in the 1970s to 161 miles in the 1990s. Additionally, the method of communication has shifted from personal contact to more impersonal methods like phone or mail. The authors attribute these changes to improvements in bank productivity, particularly the increased availability and timeliness of borrower credit records, facilitated by advancements in information technology. They argue that these changes have reduced information asymmetries and allowed lenders to react more quickly to borrower issues, thereby reducing lending costs. The findings suggest that small businesses are now more widely accessible to financing, which could lead to increased competition, efficiency, and growth. Policy implications include the need to consider the expanded competition in the credit market and the potential impact on macroeconomic policies, such as monetary policy.The paper examines the increasing distance between small firms and their lenders in the United States, both in terms of physical distance and communication methods. The authors document that the average distance between small firms and their lenders has increased significantly over time, from 51 miles in the 1970s to 161 miles in the 1990s. Additionally, the method of communication has shifted from personal contact to more impersonal methods like phone or mail. The authors attribute these changes to improvements in bank productivity, particularly the increased availability and timeliness of borrower credit records, facilitated by advancements in information technology. They argue that these changes have reduced information asymmetries and allowed lenders to react more quickly to borrower issues, thereby reducing lending costs. The findings suggest that small businesses are now more widely accessible to financing, which could lead to increased competition, efficiency, and growth. Policy implications include the need to consider the expanded competition in the credit market and the potential impact on macroeconomic policies, such as monetary policy.