Wall Street is as far as you can get from the 8-acre Steelgrass Farm in Kauai where the main attraction is chocolate, but the trickle-down impacts have made for bittersweet returns.

“;We just got turned down for a loan again,”; said Tony Lydgate, who helped his children, Emily and Will, purchase Steelgrass Farm in the 1990s. “;Our revenues are in the low six figures, but we can't even get a $20,000 line of credit.”;

The Lydgates, who have about half of all the cacao trees on Kauai, offer tours to supplement their farming income. Still, they need more capital to establish an agricultural cooperative that harvests cacao for commercial distribution.

“;We can't expand at the speed that we would like, too,”; Lydgate said.

The Lydgates are not alone. As the economy has slumped, more farmers in Hawaii and elsewhere have found that the crop of loans available to them has withered. The Small Business Administration in Hawaii is helping small business get through the downturn with enhanced financing programs, assistance with government procurement, and counseling and training opportunities, said SBA spokeswoman Jane Sawyer.

However, both the number of loans and their amounts have dropped. Hawaii awarded 318 SBA-guaranteed loans totaling $35.8 million at the close of July as compared with 415 totaling $49.7 million during the same period in 2008, according to SBA records. In addition, banks have tightened their underwriting standards, and some of the programs that cater to farmers are underfunded, said Dean Matsukawa, state agriculture loan administrator.

“;Last year our demand for loans doubled, and we approved about $4.8 million in loans as compared to $2 million in the prior year,”; Matsukawa said.

Applicants must be turned down by two other lenders to qualify for state agriculture loans, so the increase in loan volume means a weak economy, he said.

“;Usually the stronger borrowers can get conventional loans, but last year not so much,”; Matsukawa said.

Commercial lenders often shy away from agricultural loans because they are unfamiliar and come with uncertainties like weather and pests, said Sandra Lee Kunimoto, director of the state Department of Agriculture.

“;As a whole for agriculture, even in regular times, financing is always an issue,”; Kunimoto said.

While the credit crunch is a national phenomenon, the impact on Hawaii business owners is greater because high living costs leave them with fewer reserves, said Honolulu business consultant Stephany Sofos.

“;Most small businesses rely on revolving credit to make their payrolls,”; Sofos said. “;Because of the credit crunch, many have been forced to lay off staff and contract their businesses.”;

The downturn in Hawaii tourism as a result of the credit crunch and other factors also has taken a toll on state agriculture. Historic Hawaiian Farms in Keanae, Maui, which already supplies food for the tourism industry, was trying to offset rising costs by opening the farm to visitors.

“;But with the drop in tourists on Maui, no one stopped,”; said Gladys Kanoa, whose family farm is run by four generations.

A loan will have to supply the working capital to keep the farm afloat during the downturn, Kanoa said.

“;We had a really good summer, but it's seasonal. Our farm proceeds dip to half after Labor Day, and the costs of everything from fertilizer to fuel are rising,”; she said.

More Hawaii farmers are seeking assistance; however, the greater strain on their cash flow has kept some of them from qualifying, said Constance Cate, director of the SBA's East Hawaii Center.

Cate said a client was denied a loan due to high credit card use. The client had charged only $11,000 on a $20,000 limit; however, the credit card company raised his interest by 20 percent and cut his limit to $12,000, she said.

“;Now, through no fault of his own, he looks like someone with high utilization, and lenders won't touch him,”; Cate said.

Unconventional farmers, like the Lydgates, who have pursued a multi-income-farm family paradigm, have less access to funds.

“;We don't think you can make a living solely on agriculture,”; Lydgate said. “;We also offer agritourism and farm-stays, retail and educational workshops.”;

And, the Lydgates' farm is home to a state-of-the-art music studio where the likes of Ben Stiller, Jack Black and Jake Shimabukuro have completed musical and voice-over projects.

“;We like to refer to ourselves as a multi-income farm family,”; Will Lydgate said. “;We think it's the only model that works for the modern-day farmer.”;

But such diversification has limited the Lydgates' credit opportunities.

“;We don't fit into the right categories,”; Tony Lydgate said.

And, even if they did, the state Legislature raided $5.5 million from the agricultural loan program this year.

While lawmakers have taken $25 million from the farmers fund during the past 20 years, Matsukawa said that the latest transfer has left the program short.

“;Currently our balance is about $2 million,”; he said. “;After that we can't lend out until we collect.”;

Some farmers, like Howard Takashita, who runs Howard's Nurseries on Maui, will have to wait to get their full loan amounts, Matsukawa said.

“;They had requested $345,000, but we were only able to give them $130,000,”; he said. “;We won't be able to fund the rest until after September, when we get a new allotment of funds.”;