Bank loan opportunities remain strong for small business

Stocks are down. Bankruptcies are up. Talking heads are talking recession. Turns out it's a good time for small businesses to seek bank financing.

So say two bankers who should know: Bob Riter, chairman of Schaumburg-based American Chartered Bank, and Maureen Buckley, executive vice president and chief lending officer at Leaders Bank, Oak Brook.

In fact, Riter and Buckley use almost the same words when asked if it's tougher these days for small businesses to get a loan from the bank.

"It's not tougher," Riter says. "It is tougher for real estate-related loans, but there still is a robust market for commercial business loans."

"The things in the paper about tight credit apply largely to bigger businesses," Buckley responds. "It's not necessarily tougher" for small businesses to borrow.

Being in the right place helps. Thanks in part to Bank of America's purchase of LaSalle Bank, which put lots of loan officers into the job market, and to The PrivateBank, which hired many of those lenders, business loans have become "more competitive," says Buckley.

"PrivateBank hired all those new lenders" and now "must pay the freight" by generating business to support the overhead, she says.

That doesn't mean you should bring a wheelbarrow to the bank, but it does mean there are opportunities. Even if your business doesn't need additional financing, you may be able to restructure an existing bank loan -- something many banks will do to keep business loans in house.

American Chartered and Leaders certainly aren't the only options -- talking first to your own bank about a loan always is a good idea -- but the everyday focus the two put on smaller businesses is something of a differential.

Both institutions expect banking to be a two-way street, however. Most banks will ask for at least your business checking account, but American Chartered in particular wants a broader relationship.

That's primarily because the bank knows the value of knowing its customers. "We look for a strong personal relationship so that if there is a problem we can talk eyeball to eyeball," Riter says.

Buckley wants dialogue, too -- although she puts more responsibility on the borrower to reach out, particularly when there's trouble.

"The most important thing you can do is communicate with the bank," Buckley says, especially if your business hits a rough patch. "Call the bank and let them know."

Leaders also would "like to have your business checking or operating accounts," says Buckley, who's not keen on the idea that you might want to keep those accounts at your old bank. "If you want to leave them at another bank -- well, why isn't that bank making you a loan?" she asks.

Collateral matters, of course. American Chartered wants "a pretty decent collateral position," says Riter. At Leaders, the quality of your accounts receivable and equipment is a key factor, Buckley says.

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