The sea of "for lease" signs peppering Salt Lake City is a bad business omen, like tombstones keeping score of the recession.

Losing Sam Weller's Zion Bookstore from its historic Main Street home may be worse.

But many small-business owners are getting creative to survive the grim climate. And now City Hall is looking to revamp its resources -- including a multimillion-dollar revolving loan fund -- to keep more small and medium-sized merchants afloat.

Call it government imitating life, as a molasses-slow bureaucracy -- with rare urgency -- adapts to the rapidly sinking economy.

Within 30 days, the capital's economic team will present policy changes to the City Council, including adding a short-term line of credit and new levels of loans to buoy more start-ups. And private-sector interest in city aid is up, likely since traditional lending is down.

"When it started, the world was a different place," Economic Development Director Bob Farrington says about the city's 15-year-old loan fund. "We want to make sure it is contemporary."

Farrington explains the goal is to be complementary to the Small Business Administration, which just received $25 billion in federal stimulus, without acting as competition. The same principle applies to Utah's micro-enterprise loan fund, which typically offers small loans up to $25,000.

"We're trying to find that gap in the middle where people don't meet that criteria," Farrington said. "That's where we might be helpful."

Dean Offret, who ran a men's clothier before shuttering the business last year, says the city should work to protect the small shops that give the capital character. But he cautions such assistance may simply prolong the inevitable, especially if the recession deepens.

"On the first impression it sounds very exciting," he said. "But one has to really evaluate their ability to hold on. It doesn't make sense to go grab new funds if you're sinking fast."

James Michie, owner of a downtown real-estate firm, says occupancies certainly are down. "As for new demand, I don't see it on the horizon right away."

At the same time, he says, the new office tower at 222 S. Main should spur lower rental rates and more life.

"These kinds of loans could very well be the difference between a shop going dark or surviving for another quarter when times could change," said City Councilman J.T. Martin, who owns Emigration Market and strongly supports the reform. "We need to clear the decks and make it happen."

Martin is frustrated that so many consumers seem to be flocking to big-box discount chains for "perceived" savings he says punishes the independents -- the city's lifeblood.

But Ellen Reddick, president of the Vest Pocket Business Coalition, maintains most merchants will adapt and survive.

"There is no quick fix, but we're the quick fix if there is one," she said. "Well-run small businesses are doing well. They're not doing great, but they're keeping their heads above water and getting creative."

For example: Liberty Heights Fresh is carrying cookbooks from the nearby King's English. In return, the 15th and 15th bookstore is stocking Liberty's olive oil. Many landlords, Reddick notes, also are more flexible, offering breaks to reliable owners.

Farrington is surprised by what he calls the "churn" in the business community. Three would-be owners called about loans and permits this week, he said. And many others hope to capitalize on low labor and material costs. (Liberty Heights Fresh is looking to develop its parcel across the street, he notes, while Bingham Cyclery is about to relocate from its old Foothill Drive digs to downtown.)

What's more, Farrington says, continuing layoffs have flooded the city with educated, motivated people pursuing small-business opportunities.

"It's not that people have said we will lay low and wait out the recession," he added. "It's just the opposite. People have been more inventive to re-create themselves."

But having the city as a resource certainly helps.

Consider Diamond Lil's, a landmark steakhouse on North Temple since 1969 that shut its doors earlier this decade. Using the city's loan program -- twice -- owner Pete Funaro reopened the eatery two years ago. Now, along with Red Iguana, the restaurant is poised to greet visitors along the envisioned Grand Boulevard.

If the city indeed widens its loan program, Avenues resident Bryn Ramjoue suggests retailers spend some dollars on advertising -- especially in a recession.

"If we lose those businesses because we're not shopping there, we lose a sense of our city," said Ramjoue, past president of American Advertising Federation-Utah. "Then we go to the 'burbs and shop at big-box houses."

She notes merchants have been forced to scrimp, using freelancers for their Web sites or graphic design and friends for any photography.

But Ramjoue, along with Martin, expects the season's change to usher green of all kinds.

"Springtime is going to bring people outside. ... I'm hoping that once people spend a little, it may help these businesses stick it out," she said. "I can't imagine Americans or Utahns doing without for very long.

" We had a very sad winter."

djensen@sltrib.com