BOSTON (AP) _ For 20 years, Alan Hackel depended on his bank to supply a credit line that was the lifeblood of his distributing business.

He would use loans to buy furniture and other merchandise from manufacturers and would repay the debt with money he made by selling the items to retailers, hotels and restaurants.

But that arrangement came unglued several months ago when the bank told Hackel he would have to find a new lender.

''I was never late on a payment - not even close,'' Hackel said. ''All of a sudden one day, they come to us and say they can no longer maintain our loan.''

Such scenes have become more common across New England in recent months, business leaders say. Small companies are suddenly finding their credit cut off, as banks feel pressure from financial losses and government scrutiny.

To a large extent this reflects a tightening of the banking industry nationwide. Last week, Federal Reserve Chairman Alan Greenspan said a majority of banks have become much less willing to make loans, due to the weakening economy, rising numbers of bad loans and closer scrutiny by bank regulators.

But the impact is particularly acute in economically depressed New England, and some experts say it threatens to make the situation worse. They have trouble agreeing on who is responsible.

Some point to bankers who have grown more cautious after getting burned by aggressive real estate lending. Others blame regulators for excessive toughness after witnessing banking debacles in the Southwest.

''At the precise time that the economy is getting soggy, banks are forced to become stingy,'' said Gary Ciminero, chief economist for Fleet Norstar Financial Group in Providence, R.I. ''This bridge across troubled waters, namely credit availability, is being pulled away.''

Figures from the Fed reflect how credit has decayed. From 1984 to 1988, when New England was enjoying an economic boom, commercial and industrial lending in the region more than doubled to above $38 billion.

Since then, the economy has stumbled and taken the lending with it. The most recent figures available, from the middle of last year, show a decline of 2 percent.

Experts say small businesses have suffered the brunt of the credit crunch, because they tend to rely more heavily on bank loans for daily operations.

''If you're trying to expand and all of a sudden you find things are shut off, it's a time of tremendous difficulty for a small company,'' said Lewis Shattuck, president of the Small Business Association of New England. ''There's a lot of anxiety out there.''

Hackel, who employs a dozen people at R.R. Scheibe Co. in Brockton, was well acquainted with the feelings of anxiety.

''If you want to talk about mental anguish and sleepless nights and recurring ulcers, I think I asked myself many times what my options were,'' he said.

Hackel finally found a bank that would pick up his credit line - but only at $400,000 rather than the $700,000 he previously had been granted.

''It's probably going to make me watch my pennies a lot more carefully,'' he said.

Dozens of other business owners are similar positions. John Gould, president of Associated Industries of Massachusetts, said his group has found 154 small- and medium-size companies hurt by credit shortages. In some cases, the credit has been lowered, in others it has been eliminated.

Gould and other business leaders aim their wrath at what they call suddenly overzealous regulators. But the regulators say the rising number of troubled loans is due to difficult economic times, not unusually stringent standards.

''It's not like we reached into a hat and decided to crack down on these guys,'' said Frank Vance, a spokesman for the U.S. comptroller of the currency.

Some economists also question how much the economy is further harmed by the withdrawal of credit.

''The economy is like a giant ship - it's tough to turn it around,'' said Gerard Cassidy, an analyst at Tucker Anthony Inc. ''Let's say they let all the marginal developers have money; I would say there would still be serious economic problems in New England.''

End adv for Monday PMs April 23