Small-business owners listen to bankers from many of the area’s banks at yesterday’s seminar.

The Providence Journal / Mary Murphy

PROVIDENCE — Area bankers have one word for Rhode Island’s small-business owners in this tight credit market — communication.

If you’re looking to borrow money, be prepared to communicate more detail about your business and plans, a panel of eight lenders said at a forum yesterday morning hosted by the Greater Providence Chamber of Commerce.

And, the bankers said, if you already have credit, keep in touch with your banker, especially if your business is heading into trouble, so you can get help weathering the recent financial storms.

“It really is incumbent upon the small-business owner, I think, in this environment, to present a true, accurate picture of their financial situation. Be up-front. Be frank,” said Russell Hahn, senior vice president at The Washington Trust Co. “We’re willing to help. We have money to lend. I think that just about everybody in this room has money to lend for quality borrowers. It really, I think, comes down to the quality of data that you’re submitting.”

“We strongly suggest professional advice,” said Kevin Tracy, senior vice president at Bank of America. That means having a lawyer, accountant or other financial professional help prepare a proposal for the bank, he said.

“The better we can see the picture, the faster we can respond,” said Stephen Gibbons, executive vice president at Coastway Credit Union.

What do bankers look for in small-business borrowing proposals?

“Cash flow is king,” said Scott Lajoie, vice president at Bank Rhode Island. “They do need to show that they can repay the debt.”

Other factors include collateral the business can put up and the personal creditworthiness of the principals of the business.

“Personal credit and credit scores are becoming very, very important in the way we view people,” said Hahn.

Mike Paiva, senior vice president at Webster Bank, agreed. “We look at personal credit rating going hand in hand with the business side.”

Several of the bankers said they are being “more selective” when deciding which businesses get loans.

“We clearly cannot make loans to people that cannot afford to repay them,” said Hahn.

Several of the bankers — although not all of them — said many businesses are cutting back on how much they borrow.

“Companies are pulling back on the demand for loans,” said Frank Casale, senior vice president at Sovereign Bank. “We have capital we’re willing to lend.”

“Demand is soft,” said Tracy. “It’s a very over-banked market.”

“As long as the business owner is taking the more cautious view, the money will sit there,” said Hahn.

The panelists agreed that keeping a banker in the loop is a good idea, especially if things start to turn downward.

“The earlier you attack a problem, the easier it is to find a solution,” said Gibbons. “If you’re three, four months down into a problem, it’s a little more difficult to deal with it.”

“You need to go to your bank with a plan,” said Casale. “This is where we are, this is how we got here and this is how we’re going to get out.” He added, “The banks can work with you when the dark clouds are on the horizon.” Once they move in, it may be too late, he said.

“You need to communicate with us, good, bad or indifferent,” Casale said. “The most important thing is communication.”

pparker@projo.com