The foundation of this paper is the theory of the financial accelerator. The implication of the financial accelerator is that small firms have less access to debt than do large firms, and this difference is greater during recessions. Therefore, smaller firms are at a disadvantage during recessions, and this disadvantage can have significant and long-lasting effects. This paper examines the role of credit and the effect on fixed asset investment over the business cycle. The results confirm that there is a shift in credit from small firms to large firms during recessions, and, more specifically, that banks shift short-term debt from small to large firms. The main contribution of this paper to the work on financial accelerators is the focus on fixed asset investment. The results show that a positive shock to the Federal Funds Rate has no impact on large firms' fixed asset investment; however, a positive shock to the Federal Funds Rate negatively impacts the smallest firms' fixed asset investment five quarters after the shock occurs. During monetary tightening, small firms' fixed asset investments are more negatively impacted than are large firms' fixed asset investments, and this discrepancy is partially explained by access to credit.