If you own a restaurant or a small service business and you've recently tried squeezing $20,000 or $30,000 out of your bank, then you probably know it isn't the kind of loan bankers like to make. Besides their usual worries about your ability to survive, conventional lenders are fixated on collateral: if you don't have enough or if it can't be converted into cash in, say, 15 or 20 seconds, they'll show you the door.

Fortunately, for many small businesses, there are alternatives. One of the most intriguing of them comes from, of all places, companies that started out as advertising or media businesses. What they do is similar to barter, but instead of advertising space or airtime, they'll offer cash in exchange for service or merchandise credits. Frequently, they're willing to do deals that banks won't touch. Such deals work like this:

Say the company gives you $20,000 to buy advertising, refurbish your premises, or whatever. In exchange for the cash, you give it "credits" (for meals, flowers, clothing, and so on); it, in turn, offers these credits to individuals who purchase its special cards. Depending on the circumstances, you might give the company $40,000 in credits for the $20,000 in cash, but chances are, that's not as harsh as it sounds. Indeed, for a lot of service businesses, after you subtract your markup, what you give in credits will end up costing far less than what you get. What's more, you don't pay interest on this money, and you're under no time pressure to repay. The "loan" is retired as the company's cardholders use up the service credits.

In general, the underwriting standards, pegged less to credit history than to reputation, are looser than a bank's.

Two large companies operating in multiple markets are --

* In Good Taste Services, based in Miami (800-444-8872). In business for 12 years, it offers services to nearly 2,000 restaurants, retailers, and service establishments. Strongest in the New York City area, Florida, California, and Washington, D.C., the company has about 57,000 cardholders.

* Transmedia Network, also based in Miami (800-422-5090). It specializes in restaurants in New York, New Jersey, Connecticut, and Florida. In business for eight years, it has relationships with about 1,200 restaurants and has some 80,000 cardholders. -- Bruce G. Posner

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