Weak Economy Leaves Long Island Nonprofits Squeezed by Banks

As a result, he said, SCO has had to stop design and planning work on a home for children with Asperger's syndrome in the Town of Huntington and another home for mentally disabled children in the Bronx.

McMahon said he understood banks need to protect themselves, but he also said his organization is a good customer.

"We have a good record of paying it back," McMahon said.

SCO has approached almost a dozen other banks, but so far none have offered the group a line of credit.

"Certainly, they all got hit in the mortgage area pretty badly," McMahon said. "We can appreciate that problem. We get thrown in the same kettle of fish, and that's the part that just doesn't seem fair."

Douglas Manditch, chairman of the board and chief executive of the year-old Empire National Bank in Islandia, said the likely problem is that banks are worried that the government won't come through and pay the nonprofits for their services, leaving the nonprofits, in turn, unable to pay the banks back.

"It's happening because of budget cuts and fear of budget cuts," Manditch said. "It's a difficult problem."

So far, the Coalition Against Child Abuse and Neglect in Garden City has not seen its credit line affected. But its bank has turned down its recent application for additional credit, said executive director Cindy Scott. She said she wasn't surprised.

"It's a tough time," Scott said. "It's not a comfortable place, not where we would want to be."