Pickled pork skins, jalapenos and other Mexican culinary staples have been good business for El Alteno Foods so good, in fact, they've helped cushion the blow of the credit crunch.

While many companies are struggling to borrow money, the City of Industry food manufacturer and distributor is expecting to receive a $5 million loan on terms it can live with.

"We would love to get something around 6 or 7 percent," said Ruth Reynoso, the company's chief financial officer. "Our business is food, which is something you have to buy to feed your family, and we have very affordable prices."

It helps that El Alteno is dealing with a lender with which it already established a relationship, Los Angeles-based Promerica Bank. Perhaps more importantly, it is seeking to lease a new facility and expand a healthy, growing business.

But while small businesses with strong cash flow are finding they are still welcome at their local business bank, startup and entrepreneurial companies deemed greater credit risks are increasingly looking elsewhere

"The small business credit market has been affected by the consumer credit and real estate markets," said Bryan Moeller, director of small business banking at Wells Fargo in Los Angeles. "Most of our loan applications for startup businesses rely heavily on the personal credit report. We are seeing a higher usage of people's personal credit, and usage is one of the parameters that affect our lending decisions."

David Rainer, chief executive of California United Bank, maintains that the Encino bank hasn't changed its standards it's just that fewer companies are meeting them as the economy slows.

"Business conditions are becoming more challenging and we are seeing some companies showing flattening revenues and squeezed margins after years of consistent revenue growth," Rainer said.

Businesses turned down for traditional bank loans might try those backed by the Small Business Administration. The SBA has ramped up its lending in recent years, and is now funding bigger companies and more loans above $1 million, though the fees can add up. Still, the L.A. district office set a record with more than 6,100 loans in the 2006-07 fiscal year.

Another alternative is even pricier "hard money" lenders, which provide business loans secured by the commercial real estate of the borrower, at interest rates multiple points above prime.

"Over the past three months, we are seeing 50 percent more loan applications," said Mark Crawford, president of Crawford Park Financial Inc., a hard cash lender in Pasadena.


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