Retailers, manufacturers struggling to make it find interest lagging among most lenders.

Commercial banks don't have much help to offer manufacturers and retailers who are struggling to survive the prolonged recession.

In many cases, loans made to manufacturers and retailers to buy merchandise or materials, aren't being repaid on time. As a result, the banks have abandoned all but their most credit-worthy clients. Consequently, retailers and manufacturers are hard pressed to borrow money for inventory or production credit, according to analysts.

"Banks want to clean up their loan portfolios. They are pulling away from making working capital loans. The pension funds aren't quite as skittish," said Deloitte & Touche's Richard C. Thomas. He is the audit partner for the firm's financial services group.

The working capital loans are used by manufacturers to buy materials and pay workers while they are filling their orders. They also are used by retailers to buy the goods they sell to shoppers.

Price Waterhouse aerospace group analyst Reed Gardiner said manufacturers who don't already have a financing relationship with a bank will have a tough time building one. If they have an existing relationship, the banks may cut down on their credit line, the limit on the amount of money the bank will advance to the borrower at any given time.

"The only time you can get inventory financing or working capital is when you don't need it," Gardiner said. "Banks are more cautious than ever about making loans to businesses.

"All of the main U.S. banks and some foreign banks have been tapped by defense contractors. The interest charged for operating capital has dropped but it is almost impossible to borrow money if your company has any red ink," Gardiner said.

Consequently, Gardiner said, a recent Los Angeles Area Chamber of Commerce study showed that 250,000 Los Angeles area aerospace jobs could be lost if the financial markets and business climate keep deteriorating.

Some firms, particularly the defense and aerospace industries, have been dealing with the problem by sharing the cost of research and development with their subcontractors.

"If an aerospace company were developing a new generation of engine and one of their subcontractors would get 10 percent of the business that would be generated by the order, the prime contractor may ask the subcontractor to pay a proportionate share of the research and development costs," Gardiner said.

A prime contractor is a firm that makes the finished product, such as airplanes, tanks or missiles. The subcontractor makes components such as engines, seats, hydraulic equipment or gauges.

"I started to see this happen two years ago but it really has picked up in the last six months," Gardiner said.

Unless the U.S. aerospace industry comes up with some creative financing methods, Gardiner fears it may lose more ground to foreign competitors. He said Airbus Industrie of France raised its world market share of the new jetliner business from 22 percent to 33 percent between 1990 and 1991. And, he noted, the Taiwanese aerospace industry also is picking up ground in the world market.

"The aerospace industry is one of the last bastions in American manufacturing that creates wealth for this country," Gardiner said.

"If I were starting up a business today, I wouldn't go to a bank for financing. I'd look for venture capital and try to work out credit arrangements with my main suppliers," said Sam Clark, senior vice president and manager of the international banking division in Los Angeles of Mitsui Manufacturers Bank.

Many firms with existing banking relationships are watching them sour. Clark said business loan delinquencies are rising. Many accounts are more than 180 days late.

In September 1991, L.A. Gear, hungry for cash, received $100 million in loans from the Tre Foyle Capital Pacific fund of Los Angeles-based Shamrock Holdings. L.A. Gear wouldn't say if they still are having trouble funding their retail clothing operations.

Some Los Angeles firms haven't felt the financing crunch. Calabasas-based Lockheed Corp. has enough money in its corporate account to fund operations through 1996. Lockheed public information specialist Scott Hallman said the firm's financial projections show it can fund its operations from the $1 billion to $2 billion in its operating accounts that are constantly replenished when the firm gets paid for its products and services.

And service firms aren't as susceptible to the financing pinch. For example, Computer Science Corp., which has 25,000 employees nationwide and 300 in the greater Los Angeles area, is in the consulting business and, therefore, it doesn't have to purchase materials or inventory. Investor Relations Manager Bill Lackey said his firm seldom borrows operating capital.