“The 2008 market meltdown and subsequent 2009 stagnation have led to a significant contraction of liquidity in the traditional financial sector, with the banks having their capital bases severely shrunk and their credit standards tightened by U.S. government,” he says. “As a result, private companies have had their access to capital eliminated, restricted, or in some cases capital is a lot more costly than a couple of years ago.”

The government's initial efforts to make capital more available to private companies focused on small businesses, he says, rather than middle-market companies. “Those are the companies that are being most constricted and hurt in the current economic downturn.” Even if Congress acts to make capital more readily available, the impact of any legislation could be thwarted by bank regulators, Smetana notes.

What's at stake, he says, is the health of the economy. Smetana worries that if credit continues to be restricted, the recession could be prolonged.

“When capital flows out of private companies to the government because of the unintended consequences of tax policy, and companies can't borrow because of tighter restrictions, the money squeeze prevents companies from investing in people and capital, which in turn deters our economy's ability to generate jobs,” he says.

Private companies are also concerned about possible increases in taxes on individual income. Many private companies operate as partnerships, limited liability companies or S corporations, whose income is taxed at the ownership level, Smetana says, so boosting income taxes on individuals ends up pulling capital out of private companies.

Smetana says FEI's Private Company Policy Committee has not taken a stand on whether there should be separate accounting standards for private companies, a question that he says depends in part on whether U.S. accounting converges with international standards.

Since joining Eby-Brown in 1997, Smetana has led the suburban Chicago company's expansion from $1.6 billion in revenue to $4 billion. Prior to joining Eby-Brown, he served director of finance at Champion Parts and spent 11 years at Arthur Andersen.