Housing prices are on the upswing, increasing 9.3 percent between February 2012 and February 2013, the Wall Street Journal reported last week. That\u2019s not just good news for America\u2019s homeowners. It\u2019s also welcome information to America\u2019s small business owners. The drop in home prices has crimped some small companies\u2019 access to credit. According to Barlow Research\u2019s Quarterly Economic Pulse Survey, 26 percent of small businesses with between $100,000 and $10 million in annual sales used the home equity of the company's owner or largest shareholder for business purposes in the third quarter of 2012. That fraction was nearly identical to the one recorded in 2007 when Barlow\u2019s survey showed that 25 percent of small businesses in this size range tapped home equity for business purposes. While the fraction of small business owners using their homes as a source of credit for their businesses is the same now as before the housing bust, financial crisis, and Great Recession, the amount that small business owners are able to borrow against the equity in their homes has dropped substantially. Business owners are seeking to borrow against homes that are worth considerably less than before the housing bust. According to the Federal Reserve\u2019s Survey of Consumer Finances, the typical home owned by a household headed by a self-employed person decreased 14.1 percent in inflation-adjusted terms between 2007 and 2010. The amount of small business owners\u2019 home equity has likely fallen. While information on the value of business owners\u2019 equity is not broken out separately in any government statistics the way that home values are, they have likely followed decline similar to that for all homeowners\u2019 equity. According to analysis of data from the Federal Reserve\u2019s Flow of Funds Accounts, \u201chomeowners\u2019 equity in household real estate\u201d decreased 28.2 percent between 2007 and 2012, when measured in inflation-adjusted terms. Not surprisingly, the value of outstanding home mortgages has declined alongside the value of homeowners\u2019 equity. The Fed\u2019s Flow of Funds Accounts data show a 19.2 percent drop in real terms over the same period. The one quarter of small business owners who rely on home equity to finance business operations have been forced to cut their home equity borrowing as the value of that equity has shrunk in recent years. While the fall in home values is not the only factor constraining small business borrowing, it has contributed tight credit conditions in the small business sector \u2013 conditions that may account for weak hiring and contribution of the sector to economic growth in recent years.