"They almost do a strip search to get a loan approved on a mortgage," Truckenbrodt said. "It's unbelievable the information they're asking when you think just a few short years ago, people were walking in off the streets with virtually no verification of employment. It's gone totally in the other direction."
And the decline in real estate value and demand pose a huge burden. Truckenbrodt's commercial buildings were assessed at half the amount he bought them for four years ago. "We have an empty building," he said. "There are empty buildings everywhere."
Perhaps the most frustrating situation Truckenbrodt has encountered was when a bank wanted to charge him $85,000 in fees for a fairly standard loan covenant waiver and, when he balked, said it would raise the interest rate to 13 percent on his $5.5 million loan instead.
Though the bank eventually backed down, Truckenbrodt claims that being a business owner who meets his financial obligations in a punishing real estate market is a challenge. "The banks are coming in and whacking anyone who can pay their bills. If you can show any hint of staying power, they're going to come after you, raise your rates, try to hit you with penalties," he said.
"Banks have seen a lot of pressure from the regulators to address underperforming or underwater loans," said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a trade association representing 100 of the largest financial services firms. That pressure from regulators is part of the reason why banks are toughening their standards, he said.
"The reality is real estate, whether it's your home — or the land on which your business is built — has declined, and this decrease in assets makes it harder to get access to credit," Talbott said. "Financial services firms are working harder to help homeowners and business owners deal with the decrease in real estate, primarily through loan modifications."
When it comes to helping small businesses recover fully, politicians and bankers need to look at broader economic issues raised by the recession, said Dennis of the National Federation of Independent Business. "This is all tied together, and any single-minded approach really misses the point."