BILLINGS -- Small-business owners report that banks are reining in credit in the wake of turmoil in the nation's financial markets, the new regional director of the Small Business Administration said.

"What I'm hearing is probably not a surprise," said Russell Smith, who took over recently as director of the SBA's Region VIII. "In these uncertain times, small businesses are getting squeezed. They're finding that lenders are retrenching a bit on their lending practices," he said.

"But we in the SBA are absolutely here to help small businesses. We're active in working with lenders to make loans available to credit-worthy businesses. We've been active on a number of fronts to make that happen."

Smith visited lenders in South Dakota and Wyoming last week, his first on the job. He plans to meet with lenders in Helena this week.

Smith's first visit to Montana follows a gut-wrenching two-week span that includes the government takeover of mortgage giants Fannie Mae and Freddie Mac, the bankruptcy of investment bank Lehman Brothers, Bank of America's buyout of Merrill Lynch and the government takeover of insurer American International Group.

Statistics from the SBA indicate that lending actually is on the increase in Montana. As the federal fiscal year comes to a close Sept. 30, SBA lending in Montana has topped $78 million, up from $76 million the previous year, Smith said.

Most loans are in the SBA's 504 program, which is used to purchase buildings, land and other large fixed assets, Smith said.

"That's an indication that folks are expanding their businesses, trying to get out of leased locations and into their own buildings. It means something is happening in Montana," said Smith, who is based in Denver.

The SBA's Region VIII includes Montana, Colorado, North Dakota, South Dakota, Utah and Wyoming.

So far, Region VIII hasn't experienced the kind of economic slowdown that has surfaced in other regions, Smith said.

"We're still seeing high-quality projects to loan money to," he said.

Smith joined the SBA last year as senior adviser in the Office of Capital Access and as the deputy director for the Office of Communications and Public Liaison. He takes over in Region VIII from Milton "Mick" Ringsak, who retired earlier this year.

A recent economic survey by the National Federation of Independent Businesses reveals that its members are concerned about falling profits and inflationary pressures, but access to credit hasn't emerged as an overwhelming concern.

"A year has passed since the Federal Reserve declared the existence of a credit crunch, but no evidence of serious credit problems has appeared on Main Street," William C. Dunkelberg, the NFIB's chief economist writes in the organization's latest economic survey.

The NFIB said the issues of most concern to its members are high taxes, inflation and poor sales.

Smith said the SBA will continue to focus on reaching out to lenders and borrowers in order to streamline the lending process and provide better service to rural areas.

One new product, called Rural Lender Advantage, targets lenders and businesses in the most rural parts of the country. The program is designed to help streamline the SBA lending process for areas facing challenges such as population loss and unemployment, he said.