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NEW YORK (

MainStreet

) --For all the talk about how tight the small business lending market is and

how difficult it is to get the big U.S. banks specifically to extend credit,

Bank of America

(BAC) - Get Bank of America Corp Report

says that view doesn't reflect business reality.

In fact, in a conversation with

TheStreet

expanding on a recent small business loan survey, a Bank of America executive says it's business owners who may not be taking advantage of available credit.

Earlier this month, Bank of America released its inaugural

Small Business Owner Report

, a semi-annual survey about the health of the small business community. The survey included a national sample of 1,000 business owners with revenue of $100,000 to $5 million and a maximum of 99 employees

It found that 78% of those surveyed who applied for a loan within the past two years were approved, however, owners may not be taking advantage of their lines of credit to meet their business objectives.

Of the approximately 64% of the respondents who have an open line of credit today, half have earmarked the money for emergency purposes only, rather than using it as day-to-day capital. Twenty-three percent said they were trying to pay down debt so there was available capital to use, while 19% said it was their primary source of business cash flow.

Bank of America was one of 13 big bank lenders that agreed in September to increase lending to the nation's smallest businesses by a combined $20 billion over the next three years, according to the U.S. Small Business Administration.

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The commitments represented an increase of 10% or more above the banks' current levels of lending, the SBA said.

The other banks were

Citigroup

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,

Royal Bank of Scotland's

Citizen Financial,

Huntington Bancshares

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,

Key Corp

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,

JPMorgan Chase

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,

M&T Bank

(MTB) - Get M&T Bank Corporation (MTB) Report

,

PNC

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,

Regions Financial

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,

SunTrust Banks

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,

TD Bank

,

Wells Fargo

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and

US Bancorp

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.

BofA also committed to hiring 1,000 small business bankers across the nation.

Robb Hilson, a small business executive for Bank of America, recently spoke with us about the relationship between small business owners and the big banks...

What does the landscape for small business lending look like these days?

Hilson:

Demand for credit has been improving for several months. We're seeing it in our numbers. I hear it when I visit

small-business clients; there is more optimism as our recent survey points out. Sixty-one percent of small-business owners expect their business to grow over the next 12 months. That's translating into more demand for credit.

Closed new credit is up 20% over last year and 21% quarter over quarter. In spite of all the challenges and concerns and stresses of running a small business, small-business owners are resilient and they're more optimistic about the future.

Seventy-one percent had enough capital to run their business; 78% were approved for credit when they applied over the last couple of years and while

credit makes the list of concerns ... it's way down the list. Their

top concern is the effectiveness of our national leaders followed by consumer spending and health care costs. Farther down the list is credit availability.

I think there is this notion that big banks aren't lending. I can assure we're trying to make every good loan we can.

So what is a "good loan?"

Hilson:

A good loan is -- at the end of the day, we're looking for a small business owner's ability to repay loans. So it's all about cash flow.

We're excited about deploying 1,000 small business bankers throughout the U.S. These small business bankers are charged with spending time, getting to know small businesses -- what their plans are, challenges are, what their opportunities are -- to better understand what they're doing and how we can help them.

A FICO score matters, but it's not the end-all. It's really spending time with the small business owners and understanding how we can help them grow their business.

Part of the perception that banks aren't lending is because they tend to prefer more bricks-and-mortar type establishments. Something like a social media company is not easily understood by a banker because there are no tangible assets. What do you say to this?

Hilson:

We have been very supportive as a company of what goes on in Silicon Valley. We have many relationships with some fantastic tech

companies that weren't always big, fantastic tech companies. Most of our

clients have revenue of less than $250,000 a year.

We spend a great deal of time with a lot of small business owners. They want advice and they come to bankers for advice. They're not saying, for instance, 'How can you help take me public?' What they're really saying is , 'I understand there is an epidemic about check fraud. How can you help me with check fraud? Help me with a retirement solution for my employees.' These are the kinds of things that small-business owners are asking advice around.

So what ensures that a small business owner gets approved for a loan?

Hilson:

Depending on where they are in a company's life cycle, we would look for financial statements and personal statements. We want to understand what they're plan is, who they buy from, who they're selling to and ultimately we're looking at their cash flow and the ability to repay whatever credit they're

applying for.

Anything else small business owners should know?

Hilson:

One of the things that we're really focused on is not just the business side, but how we can support them on the personal side, or with health saving accounts or retirement solutions, or how we can support their employees.

We pair small business owners with financial solutions advisors...those are the experts who work with our small-business owners around investment solutions, as an example. Being able to provide a comprehensive approach to meet their needs is something they really value.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to:

Laurie.Kulikowski@thestreet.com

.

To follow Laurie Kulikowski on Twitter, go to:

http://twitter.com/#!/LKulikowski

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.

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