This paper examines the economics of financing small businesses in private equity and debt markets, focusing on the financial growth cycle paradigm where different capital structures are optimal at various stages of a firm's development. The authors discuss the sources of small business finance, how capital structure varies with firm size and age, and the interconnectedness of small firm finance. They also analyze the impact of the macroeconomic environment on small business finance and review existing literature, suggesting future research directions. The paper highlights the unique characteristics of small business finance, such as informational opacity, and the role of financial intermediaries in addressing these issues. It provides an overview of key research issues and empirical data on small business finance, including the distribution of funding sources and the evolution of small business finance over the financial growth cycle. The paper also compares the financing of small businesses with that of large businesses, noting that small businesses primarily rely on private equity and debt markets, while large businesses have access to public markets.This paper examines the economics of financing small businesses in private equity and debt markets, focusing on the financial growth cycle paradigm where different capital structures are optimal at various stages of a firm's development. The authors discuss the sources of small business finance, how capital structure varies with firm size and age, and the interconnectedness of small firm finance. They also analyze the impact of the macroeconomic environment on small business finance and review existing literature, suggesting future research directions. The paper highlights the unique characteristics of small business finance, such as informational opacity, and the role of financial intermediaries in addressing these issues. It provides an overview of key research issues and empirical data on small business finance, including the distribution of funding sources and the evolution of small business finance over the financial growth cycle. The paper also compares the financing of small businesses with that of large businesses, noting that small businesses primarily rely on private equity and debt markets, while large businesses have access to public markets.