Recent hand-wringing over small businesses' access to funding is in no small part because of the turmoil at CIT Group Inc., a major small-business lender that has undergone a swift restructuring in bankruptcy.

Since the nonbank finance company started running into trouble, customers have been looking for alternatives, either to replace their credit lines entirely or to at least help diversify their exposure. Select banks including BB&T Corp., which has an established commercial finance business, have been helping to fill the void, in many cases picking off the safest credits that have approached them. But most commercial banks are reticent right now to wade outside their comfort zones, especially to chase business that frequently is centered on pure financing as opposed to relationship banking.

Contractions in credit also have small businesses rethinking their entire position in supply chain finance.

Karl Alomar, the chief executive of China Export Finance, said distributors to the retail industry — which typically have relied on lenders like CIT to purchase and manage their invoices to merchants — have always carried the bulk of the financing burden in their business. Managing that responsibility often required flexibility to perhaps raise equity or take out mezzanine debt to cover funding needs in peak seasons or in times of credit shortages. But the financial crisis has left small businesses with far less leeway than they had before. As a result, many are now leaning on their suppliers — factories in Asia, for example — to take on some of the debt risk.

"The sellers in China are now being forced to look for credit," said Alomar, whose firm purchases receivables from Chinese suppliers of clothes, housewares, electronics and auto parts, and establishes payment terms and schedules with importers of the goods.

The dislocation in the credit markets has driven some business to alternative financing providers like China Export Finance, which was founded in 2004 and began marketing itself in China in mid-2006. "Cash is king right now, and working capital is a key source of that," Alomar said. But the firm also is dependent on banks regaining their strength — it relies on foreign bank syndicates for the bulk of its own funding.

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