The local savings institution has always been a place to get a mortgage for your house, but nowadays it is also a key source of working capital for your business. In the three years since Congress gave the $1.1-trillion savings bank and savings-and-loan industries the green light to make commercial loans, more than $10 billion has been committed. And much of the money is ending up in the coffers of small businesses.

Unlike the commercial banks they compete with, savings institutions tend to have small staffs and smaller commercial loan operations. This means that chief financial officers of many companies will often find themselves talking directly to a loan maker rather than to a freshly minted businessschool graduate who is writing his or her first loan proposal.

Greater flexibility of loan terms may be another reason to consider a savings institution when shopping for a revolving credit line. James W. McKeighan III, senior vice-president at Atlantic Financial Federal in Bala Cynwyd, Pa., concedes that his interest rates are not necessarily lower than a commercial bank's, but he can amortize the loan over a longer period of time, making the deal more affordable for some customers. Since Atlantic Financial started making commercial loans last September, it has amassed a $45-million loan portfolio.

At Comfed Savings Bank, in Lowell, Mass., senior vice-president Jerome Olin has loaned $30 million in the past nine months by targeting small, private companies. S&S Electronics Inc., a $14-million Lowell distributor of computer peripherals, turned to Comfed when the lending officer at the big Boston bank where S&S had its account joined Comfed. Although S&S's former bank responded with an offer to finance $2 million in loans at prime (three quarters of a percentage point below what S&S had been paying), S&S president Tom Donegan forsook the opportunity to shave one quarter off the rate Comfed quoted. Saving a few dollars in interest pales by comparison with the quicker service Donegan finds at the thrift, he says. "I can get a decision within a day or two on projects we want to undertake. The smaller [institution] tends to to that very well."