State Sen. Lynn Bromley, D-South Portland, said the stories she hears about the availability of credit in Maine don't add up.

On the one hand, bankers assure her that banks in Maine are sound, avoided making bad loans in the last few years and have money to lend.

"And on the other hand, we're hearing you can't get any money," said Bromley, who has called a meeting of her Business, Research and Economic Development Committee to try to sort out the conflicting views on the credit market in Maine.

"It's a parting gift," Bromley said of the meeting. She's a term-limited legislator who wants incoming lawmakers to have a good sense of how much money is available for business expansion or start-ups in the state.

Joseph Murphy, chairman of the Maine Bankers Association and president of Bar Harbor Bank & Trust, said all the Maine-based community banks he's aware of have money to lend, but admitted that credit standards are at least somewhat tighter than they were a year ago, when credit nationally became harder to get and lenders started using stricter eligibility guidelines.

"They're all making prudent loans and nobody's stretching to make imprudent loans in a weak economy – that's a fact of life," Murphy said.

Murphy also said that fewer people are applying for business loans – probably holding off because of the weak economy – and that could create the impression that banks aren't lending.

"Everybody's hunkering down out there" because of turmoil in the stock market, business cutbacks and sharp decreases in consumer spending, he said. Entrepreneurs, in particular, "in more bullish times might have taken on projects that they're not doing right now."

Murphy said Maine banks have generally followed conservative lending practices, but now are more likely to be challenging sales or cost assumptions on business plans they are presented by loan-seekers.

"It will be a tough time for starter businesses," he said. "Optimistic projections might be more suspect than they were a year ago."

Murphy said that means borrowers with a good track record are likely to find bankers competing for their business, while those looking to start a business are going to need to come up with a very sound plan in order to land a loan.

"You have to be very sure of yourself" to seek the loan, he said.

Bromley noted that her committee doesn't have any regulatory power over banks, so she's not looking for legislative fixes to address any credit issues. Monday's session, which is scheduled to run from 9 a.m. to 4 p.m. in room 208 of the State Office Building, is intended more to assess credit market conditions in Maine, she said.

Bromley said incoming lawmakers are more likely to be dealing with budget problems next year, but noted that the ability of businesses to start or expand will have an impact on state revenues. Bromley said she also wants to look at a few other issues, such as how economic development officials assess the ability of Maine start-ups to access venture capital and how state development programs match up with federal programs.

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald