Loans, even some of those elusive TARP funds, are available. Just think regional banks and smaller (Page 2)

So don't expect Mercantile to prop up just any mogul-in-training. Most willing lenders are survivors of this mess specifically because they've been wary about who gets their legal tender. You can bet your bottom dollar that they're not about to weaken their lending criteria in this climate. But if you have good credit, if your business shows positive cash flow and if you have collateral such as property, you can probably get a loan.

Hurn says he asks one question when evaluating a potential customer: "Is there enough capital spun off by a company to cover the debt on the loan?"

"It's not that complicated," he says. "We look at tax returns, we take rent, profits, we look at non-cash expenses; add all that, and that gives an idea of the capital spun off on the business. We compare that to the annualized debt on the loan. Say the business spins $1.20 for every dollar of debt payments. If it's that or higher, chances are we'll approve the loan. We'll also look at credit scores and make sure you're a good boy or girl."

At Sterling National Bank the story's much the same: Those who wouldn't have gotten a loan before the markets' collapse in the fall still won't get one now. Still, the bank recently took $42 million in TARP funds, and president John C. Millman says "for every dollar we took in from the Fed, we could leverage 8 to 10 times that." Half of the TARP cash it has will go to new clients, he adds.

"We have lots of liquidity," Millman says. "But we saw it as a once-in-a-lifetime window to access more new clients."

Sterling's lending policy is conservative, too. Restaurants and construction companies are out of luck here.

"All of our clients are entrepreneur-owned, and we require personal guarantees," Millman says. "We have not changed how we lend. There's an effort to redouble our underwriting and our caution."

California Bank & Trust didn't get into the subprime real estate mess, and now it has plenty of money to lend, including TARP-backed funds. Its parent, Salt Lake City-based Zions Bank, took $1.4 billion in TARP money, with some of it--including lines that range from less than $100,000 to a recent record-setting loan of $19.5 million--flowing through the West Coast institution.

Senior vice president Steve Borg says it's important for the California institution's bottom line to keep lending: Many recession-wary business owners are concentrating on paying down debt, making it hard on banks that depend on interest for profits.

"Some businesses are paying down and paying off their debts," Borg says, "so it's important for us to keep the lending machine lending."

Indeed, while major banks focus on balance sheets, the leaders of some small, regional and midsize institutions want to make it clear that entrepreneurial lending is the lifeblood of American business. They want to keep it flowing.

"I think that's where the economic turnaround is going to come from--small business," says Sterling head Millman. "It drives employment. The turnaround is going to come from the bottom of the economy, not from the big companies at the top."

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