When you need cash to grow your business, the first source to consider is traditional lenders. These include banks, credit unions and non-bank lenders such as finance companies.

According to the Federal Reserve, commercial banks are the biggest source of loans to small businesses, supplying 65 percent of the total dollar volume of outstanding loans. Other financial institutions, including finance companies, provide 25 percent of outstanding loans.

Despite the recession, lending to small firms actually increased between 2000 and 2001, the most recent year for which Small Business Administration figures are available. The number of loans under $100,000 (many of which were credit-card loans) grew 10.1 percent; the total amount of those loans in the same dollar category increased 4.4 percent.

For complete details, including state-by-state data to help small businesses select a lender, see the SBA’s report “Small Business Lending in the United States, 2001 Edition."

Most lenders have a small-business department, and many administer SBA loan programs. Unfortunately, not all are familiar or comfortable with SBA paperwork, so don’t assume every banker will automatically consider your eligibility for SBA loans. If you believe that’s the direction you want to go, talk to your local SBA office beforehand. Find out which area lenders commonly submit SBA loans, or read the report cited above.

It makes sense to begin with the bank or credit union where you keep your business accounts, especially if you’ve already developed relationships with the management. If you haven’t, it’s time to get to know your banker.

When you make deposits and withdrawals, don’t use the ATM or drive-up window. Take the time to go inside and chat with the branch manager. Being friendly with your banker doesn’t guarantee he or she will approve your loan, but it can improve your chances. It also means you’ll feel a lot more comfortable when the time comes to make your pitch.

Borrowing from a traditional lender is safe and predictable. If your business is strong and you have good credit, the odds of getting the money you need are excellent. If your history has a few blemishes, check out the SBA loan programs. By providing a sizable government guarantee for loans, they help assuage a nervous lender’s fears.