LEWISTON — U.S. Sen. Olympia Snowe heard about Mainers’ frustrations with Washington during a forum on lending with small business owners and bankers, which brought more than 50 people to the University of Southern Maine’s Lewiston-Auburn College on Wednesday.

Snowe, the Ranking Republican on the Senate Committee on Small Business and Entrepreneurship, said she held the meeting to “get a sense of what’s happening on the ground on Main Street” heading into 2010.

“What is happening with small businesses, what needs to be done, what we should do in the future?” she asked. “As small businesses, you’re the ones who are going to lead us out of the economic recession and certainly lead us on the road to economic recovery.”

Snowe said uncertainty in the small business community about how emerging Washington policies, particularly health care, may impact them, is preventing investment in job creation.

“We should be much more conservative in that effort in terms of everything we do and evaluate it with respect to the effect it will have on small businesses and generating jobs in the economy; that’s a problem, it’s a huge issue, and I’m hearing this all over the place,” she said.

Representatives from Maine’s banking community, the Androscoggin County Chamber of Commerce, the Androscoggin Valley Council of Governments and the U.S. Small Business Administration also joined Snowe on a panel that spent more than an hour fielding questions from the audience.

John Kendall, president of CHIPCO International in Raymond, said the problems he’s encountering are entirely predictable, and facing countless businesses, but he’s at a loss as to how to fix them

“When you’re sales drop 20 to 30 percent in 2008 and 2009, you laid off people, you had salary and wage cuts, all the things that you read in newspapers,” he said. “And then you go back to the bank, whether it’s Camden National or some other bank, and you talk to them about getting a loan. You have no assets which are not already pledged. When you go back to see whether your assets have any equity, those assets are now depressed in this economy. So you are in a box that you cannot get out of.”

Kendall said it’s a “horrendous environment” to get new equity.

“The small business owner spending a number of days in meetings in front of bankers, who go through three and four levels of loan approvals to finally get turned down to start the next one is not a happy one,” he said.

Chris Pinkham, president of the Maine Association of Community Banks, said Maine’s banks are strong and want to lend, but are facing stringent regulations as blow-back from the financial crises of 2008.

“The banks that you know here in our state haven’t changed our underwriting standards, what’s changed is a lot of sources for loan money in other parts of the industry have disappeared,” he said. “What’s happened to us is that the regulators, in responding to the 100-plus institutions that have failed around the country have come in with very aggressive standards by which they are reviewing loan portfolios.”

Pinkham said one direct impact in Maine has been the additional premiums required by the Federal Deposit Insurance Corporation, an independent agency that insures bank deposits.

“Because of the failures around the country, banks have had to pay additional premium into the funds,” he said. “At the end of 2009, we were required to pay three years’ advanced premium into the fund — a bank like Bangor Savings Bank with $2 billion had to write a check for $10 million on Dec. 31. That’s money we had to take right off the bottom line.”

Snowe said she hopes to work with the Obama administration when Congress reconvenes later this month to put together legislation to spur job creation. She hopes to incorporate some ideas she’s already drafted, such as expanding a pair of SBA loan programs and making permanent a now-expired provision from the stimulus package that allowed small businesses to write off up to $250,000 in operating expenses in a given year.

“Pro-growth tax incentives, those are absolutely essential,” she said, adding that she has written to Obama officials requesting they explore the idea of using unobligated stimulus fund dollars to pay for any job creation initiative.

The House passed a jobs package before they adjourned last December.

In order to effectively stimulate the economy and spur job growth, Snowe said Washington has to focus on small businesses.

“We may be wishing in Washington that things are going to be turning around, that there’s going to be an economic rebound as time goes on. But the fact is, you’re dealing with realities here on the ground that the lending is not happening,” she said. “That is something that we are clearly going to have to address and wrestle with, because without that lending and without certainty in Washington about policies, because policies do make a difference.”

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