As the recession has weakened both businesses and banks, small business lending has fallen by tens of billions of dollars.
Some small businesses are complaining that they're having a hard time getting the loans they need to maintain or expand their businesses.
Becky Sturm runs StormSister Spatique on St. Paul's West Side, selling hair-care, nail and other grooming products at her store and through her website.
Sturm says that when she opened her shop in 2006, getting a loan was a breeze. Now, she wants to add more products to boost her slumping sales, but she she's been rejected for a loan four times in the past year and a half.
"It's been a tough couple of years and I'm supposedly not bringing in enough money for them to justify giving me a loan," she said.
Sturm complains that all banks care about today are numbers, like debt, cash flow and profit.
"They need to have faith in us," she said. "We have faith in ourselves. We're still here. It has been a nightmare these last two years and they need to take a chance."
Sturm is not alone. From June 2008 to March 2010, banks cut the small business loans on their books by about six percent, more than $40 billion. These are loans that go to businesses with 500 or fewer employees.
Congress has been working on legislation to encourage banks to lend to small businesses. The $30 billion proposal assures banks would get up to 90 percent of their money back if a loan goes bad.
In Minnesota, the decline in small business lending seems to be in line with national figures.
"We do know there has been a substantial decline for, let's say, the last 18 months," said Ron Feldman, a senior vice president at the Minneapolis Federal Reserve Bank, one of the agencies that oversee banks in Minnesota.
Feldman says bankers offer a variety of explanations for the drop in small business lending.
"It might be that in a weak economy the small firms have less need," he said. "They don't want to expand so they don't need the money. Or it might be in weak economy the small firms are weak therefore the banks don't want to make loans to them. It could be the banks have decided they want to tighten up their criteria. And finally, it might be banks are in bank shape themselves."
About one-fifth of banks chartered in Minnesota lost money in the first half of this year and, Feldman said, weak banks make fewer loans.
Meanwhile, with the recession, more businesses have been bringing in less cash, posting lower profits and seeing buildings and other potential collateral drop in value. That hurts their chances of getting a loan.
"We've got plenty of money to lend and good government programs to help back that up, if we need to," said Paul Flood, regional Small Business Administration loan manager for Bremer Bank. "Right now, probably the biggest hurdle we're seeing is the financial condition of borrowers."
In New brighton, a truck hitches at Universal Transportation Services up with a trailer that carries shipping containers. Universal's owner, Brent Bois, has survived a brutal industry shakeout that put many trucking firms out of business.
"We've been hit pretty hard," he said. "And we've had to lower our rates to customers just to stay in business and probably taken anywhere from a 10 to 15 percent rate decrease in that time."
Bois has been able to get the credit he needs to keep the business going, but the interest rate is higher.
"We're paying a fair amount more for the money," he said.
The trends are boosting small business lending at giant US Bank, which largely sidestepped the mortgage meltdown.
Vice Chairman Richard Hartnack said that's partly because small businesses are coming to his bank from banks that folded or cut lending.
US Bank also has been busy buying up banks around the country and emphasizing small business lending, he said.
"There are still good businesses, and we lend money to them," Hartnack said, adding they just have to meet traditional, sound-lending standards.
"You're going to get financed if your financial condition is still balanced -- if you're profitable, if you can service your debt, if you're able to pay your vendors."
And that seems to be the bottom line -- healthy firms can get credit from healthy banks. But that combination is harder to find these days.