Bankers and small business owners clashed during a Senate hearing on small business lending on Thursday, as the entrepreneurs complained of scarce credit while bankers insisted they had not cut back on lending.

"Clearly, there´s a disconnect on Main Street about what is being said and what´s actually being done," said Bob Cockerham, the owner of a chain of car dealerships in New Mexico who said his bank had cut the line of credit he needed to buy new cars. "We on Main Street, we need to get access to capital."

Two seats away at the witness table was David Rader, Wells Fargo´s executive vice president for Small Business Administration lending, who described Wells´ efforts to increase SBA lending and expand its small business-lending staff. Rader insisted Wells hadn´t cut its credit lines, and was actually ramping up small business lending.

"But my bank is Wells Fargo," exclaimed Cockerham, who said he had never missed a payment but had been told by his lender that he could no longer make use of his long-standing lines.

Bankers said new expenses, along with pressure from regulators to be more prudent, were forcing them to reassess the creditworthiness of their borrowers.

"We are being pulled in two different directions," said Louisiana community banker Guy Williams, adding that the recent increase in Federal Deposit Insurance Corp. premiums, along with the possibility of a one-time FDIC assessment, had drained capital his bank would otherwise lend.

"Unfortunately for our customers we will have to slow our loan originators this year and may also have to reduce originations in 2010," said Williams, who is the president and chief executive of Gulf Coast Bank & Trust Co. He said higher taxes as well as the heavy consequences of taking money from the Treasury Department´s Troubled Asset Relief Program, also made lending more difficult.

"The changes which have occurred and those that are expected in the near future will make further increases in our lending almost impossible," he said.

Senate Small Business Committee Chairman Mary Landrieu, D-La., said she planned to hold another hearing to find out whether regulators were part of the problem. "The idea is of course for every dollar that is allocated by this Treasury, the goal of that dollar is to find its way to Main Street as soon as possible. Obviously, there´s some bottlenecks," she said. "We´ll ask the regulators to come in here for their views...This committee can work in partnership with other appropriate committees to fashion solutions.

The divide went beyond the bankers and business owners to trade group analysts.

James Chessen, the chief economist for the American Bankers Association, said in his opening statement that more aid to larger companies would help revive small businesses.

But Todd McCracken, the president and CEO of the National Small Business Association, said his surveys of small business owners had revealed that lines of credit from banks were what businesses needed most.

The witnesses generally agreed that recent changes to SBA programs, including an increase in the guaranteed portions of SBA loans to 90% and the elimination of fees for borrowers, would help get small business lending going a little.

Williams pointed out that the fee reductions would mean more cash flow for borrowers to show to lenders, which could make lenders more comfortable granting loans.

Cockerham said he hoped that his next round of visits to local lenders engaged in SBA lending would be more fruitful than the last, when everyone turned him down for a new loan. Time, for him, was running out, and he had already closed some of his dealerships and put his house up for sale.

"We´re optimistic," he said.