LOS ANGELES — The TV commercials are heartwarming — Richard and Gloria Pink, sitting in their busy hot-dog stand on Los Angeles' La Brea Avenue, remember how Bank of America gave Richard's parents the loan that helped them build their wiener business more than 50 years ago.

In the ad, Bank of America says it helps small businesses grow by giving them loans.

The ad is one of many by the country's biggest banks touting their lending records in recent months, but the reality has proved much different for business owners such as Paul Boettcher, who co-owns five Los Angeles-area restaurants.

Boettcher said that in the past few years, he has applied for loans from dozens of banks he's done business with in the past in hopes of opening three more restaurants. With real estate values depressed, he said it's a great time to buy closed restaurants on the cheap.

But the big banks didn't look twice at his loan documents before turning him down, said Boettcher, who has never managed a restaurant that failed.

"The smaller banks are the only ones who will even entertain the idea," Boettcher said.

Economists have put forth many reasons the nation's economy isn't creating many jobs. They say businesses aren't hiring because there's not enough consumer demand, because jobs have been outsourced, because regulations or "uncertainty" are killing businesses' interest in expanding.

But business owners such as Boettcher say they're not hiring for another reason: They can't get the money to expand.

The same banks that had loose lending practices before the recession are hesitant to lend.

"Banks are more comfortable making loans to large corporations, but many are flush with cash and may not need to borrow," said Bernard Baumohl, chief global economist of the Economic Outlook Group. "Small businesses are the ones having the most difficulty."

That doesn't bode well for the growth of an economy in which private-sector employers play an increasingly important role as governments continue to slash payrolls. Small businesses, those with fewer than 500 people, employ half of all private-sector employees.

Loans to small businesses totaled $607 billion in the three months that ended June 30, down from $609 billion the preceding three months, according to data from the Small Business Administration.

In Los Angeles, banks have made 2,477 loans to small businesses so far this year; in all of 2007, they made 6,194 loans.

"There's still not an incentive for banks to lend," said banking analyst Nancy Bush, a contributing editor to SNL Financial. "You can have very good financials, and they are still very (unwilling)."

Some banks say they are being more cautious than they were four years ago, and with good reason. Then, they say, the economy was booming, and new businesses didn't have trouble making money and repaying loans.

Now, many small businesses are on shaky footing. Some have gone deeply into debt.

This article was written by Alana Semuels and posted in denverpost.com.