Unlike bigger firms, the nation's small businesses have largely avoided the impact of recent turmoil in the financial markets, a Federal Reserve official told members of Congress on Wednesday.

Despite tighter lending conditions following a rash of bad loans in the sub-prime mortgage market, the so-called credit crunch "has not seriously harmed access to credit by small businesses," Federal Reserve Governor Frederic Mishkin said at a House Small Business Committee hearing on the state of the small business economy.

Mishkin said small-business owners are likely more concerned with ongoing declines in the housing market, since many use real estate assets as collateral for business loans.

"Having price stability makes it much easier for small businesses to plan and make investments," Mishkin said.