I’ve always considered myself lucky because I’ve never had to borrow money for my business. When I hung out my PR freelancer/ghostwriter shingle in 1989, my start-up expenses were minimal. I already had a desk, a computer, and a printer so, as I recall, all I bought was a fax machine and some business cards. I worked from home, as I still do, so no office rent money was required. My working capital requirements are also minimal so I’ve never needed a line of credit.

Most businesses, of course, do not have such minimal start-up or working capital requirements; many must seek loans and lines of credit from banks to help them open their doors, to grow an existing business or to tide them through burps in their cash flow. An article I just read in Inc. magazine brought home for me just how tough the lending environment still is for small businesses. In “Hard Lessons in Modern Lending,” reporter Burt Helm tells the stories of business owners who were absolutely slammed when the big banks who held their lines of credit decided to dump them from their lending portfolios despite the fact that the businesses had never made a late payment.

In several of the cases, the businesses had bounced back from the recession and were looking to grow again. They not only had their growth plans put on hold indefinitely but their businesses put in extreme peril by senior banking officials who decided to threw entire regions and industries under the bus.

As Helm reports, banking in the United States is even more consolidated now than it was before the recession, giving small businesses even fewer options to choose from. Here are some of the scary statistics he provides:

“From 2008 to 2010, the volume of business loans dropped some 22 percent. In cash terms, commercial lending experienced a $325 billion decline over those two years; the volume of small-business loans (generally defined as loans of less than $1 million) fell by $26 billion, and then kept falling: By June 2012, small-business loans were down $56 billion from their June 2008 peak of $336.4 billion.”

I recommend reading the entire article because it’s a real eye-opener. But if you don’t have time for that, here are four key steps Helm recommends small business owners take if you already have a line of credit with a big bank or if you’re looking to borrow any time soon:

1.  Perform your own stress test. If you already have an outstanding loan, review the loan covenants and imagine worst-case scenarios that might cause the bank to pull your loan. If things go wrong, assume the bank will play hardball and have a game plan in place in case they do. I know from my work in crisis management that companies are often reluctant to consider worst-case scenarios, but this is necessary work that may some day determine whether your small business survives.

2. Spread the risk. Rather than relying on a single line of credit, apply for several smaller credit lines at different banks. That way, your working capital won’t dry up totally if one bank decides they no longer want your business.

3. Be too big to fail. Consider borrowing from a community bank rather than one of the big national or regional banks. Yes, you might pay higher interest rates, but small banks have far more flexibility to tailor loans to your needs, and there is huge benefit to actually knowing the people who will be deciding the fate of your loan. I think of this as the big fish in a small pond approach; if you are a big customer of a small bank, they are more likely to work with you through the tough times.

Too many small business owners get caught up in chasing the lowest possible interest rate that they put themselves in jeopardy by dealing with banks where the decisions are being made hundreds of miles away by people who don’t really know their business.

4. Stick with what fits. If you plan to use a piece of equipment for five years, get a five- year loan, Helm advises. The smaller payments on a longer-term loan may seem attractive, but you don’t want to be paying for something after the end of its useful lifespan.

What has your experience been with borrowing money for your small business? Do you have any tips that might be helpful to others?