(Businessweek) — If you haven’t had luck landing a business loan or credit line from the big banks you’ve approached, don’t expect your odds to improve any time soon. The Basel III guidelines, intended to prevent further financial crisis, will require lenders such as Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), and Wells Fargo (WFC) to substantially increase the capital they hold against risk-bearing assets—up to five times what they are required to maintain today. In anticipation of the changes, which will start to go into effect in 2013, big banks are making changes to lending practices now. They’re increasingly “terming out” small business lines of credit as they reach maturity, according to several lenders and intermediaries with whom I’ve spoken recently. To give you a quick sense of available alternatives, I’ve sketched your best bets:
1. Small Business Administration-Certified Nonbank Lenders. While only 14 exist, they have a grandfathered status from the SBA, which oversees them instead of state and federal bank regulators. This enables them to take on loans that competitors can’t. These lenders focus on theSBA’s 7(a) and 504 guaranteed loans, which top out at $5 million. Their employees target specific regions and industries, allowing them greater flexibility when performing underwriting. (While a generalist will rule out all businesses in a struggling industry as undesirable, a specialist who understands the sector knows how to spot sound businesses.)
