Despite the uncertainty and doubt that lingers over the economy, banks are making loans

Yes, Virginia, bank loans do exist. Long Island, New York, the Northeast, and the nation as a whole have suffered a historical decline in employment, real property values, demand, consumer confidence, and credit quality. The country is in the midst of the "great recession" and despite comments from pundits and increases in the Dow Jones industrial average, likely not out of the woods yet. Politicians and news media have stated that aggressive risk taking by "banks" caused this squeeze on credit availability, and, thus, banks are not making loans. This isn't completely accurate. Despite the uncertainty and doubt that lingers over the economy like a dense fog, banks ARE making loans. What is different is that banks are making loans to creditworthy borrowers. New loans are being made by commercial banks, especially community banks that have deep roots in the communities they serve. New loans are being made for all segments of the market, including small businesses and commercial real estate. What are banks NOT doing? Banks are not making speculative interest-only loans to over-leveraged borrowers for vacant properties. Banks are making few, if any, construction loans because the market for new homes is very weak. Banks are not making loans to marginal companies in weak industries. Banks are not making loans on vacant properties in the hope of stabilized occupancy. For many years bankers were making loans under these terms and scenarios. Many see the change in the attitude of bankers as a new approach, and many people are afraid of change. Some customers are wondering if their banker approved a loan for them two years ago; why not now, when their financial condition hasn't changed. Think of baseball teams wearing jerseys from a generation ago. The colors may burn your retina, and the pinstripes may be a little wide, but it's simply a reminder of the team's roots, and the way life used to be. I would regard what we're presently experiencing as the Next Generation of bank lending, which is a throw-back to lending the "old fashioned way." What is lending the '"old fashioned way?" What does this mean for the small business owner, entrepreneur, or commercial real estate investor? It means you need to adjust your thinking and business plan to adapt to the world we live in. It isn't reasonable to expect a bank to finance 100% of your project. You need to adapt your business plan to demonstrate your ability to generate and hold liquidity. Demonstrate your willingness and ability to take risk with your money by injecting your cash into your business or project. Demonstrate your ability to manage your business or investment, and make the tough decisions that are necessary in this economic climate. Demonstrate your ability to generate positive cash flow. Demonstrate your ability, and that of your business or property, to withstand the type of economic shocks that became reality over the last year. Inevitably, these shocks will happen again because history has a way of repeating itself, as it is now. If you are unsuccessful in obtaining credit, then perhaps you need to rethink the approach you are taking with your banker. Or, maybe you need to reconsider the opportunity you are trying to finance. If there is one important piece of advice I could offer it is to communicate with your banker. Communication is a two-way street, and it is vital for your business to keep the lines of communication open with your banker. If you are applying for a loan, bring your banker all of your financial information, and be up-front with both the good and bad news. The more you show your banker and more honest you are, the more he or she can help you. It is important that you are the one delivering bad news to your banker, because somehow the bad news will eventually make its way to your banker's desk. In addition, seek the advice of your banker. A good banker is always listening to their customers' views of the marketplace. When a banker asks you "how's business?," he or she is using you as a gauge to take the temperature of the business climate. As a result, your banker can be a good sounding board because of the knowledge gained from listening to business owners in a variety of industries. Finally, take the view that the glass is half full. While we are faced with many challenges right now, Americans have always demonstrated their resolve, and their ability to adapt to environmental changes in a way that is second-to-none in the global marketplace. Good entrepreneurs and strong managers have the innate ability to react quickly, make decisions, and persevere in the face of adversity. Christopher Hilton is the senior vice president and chief credit officer for Empire National Bank, Islandia, N.Y.