Oh hell. Bad news. Gail Williams of beerbybart.com passes on a story published today on line by the Sacramento Bee: Elk Grove Brewery & Restaurant has folded. The reason: Couldn’t get credit.

Elk Grove is located on Hwy. 99 between Sacramento and Stockton. Their brewer Bill Wood has won strings of awards at the Great American Beer Festival and elsewhere. Here’s the bare bones from the Bee, but then, please read the rest of the story. It’s damn sobering.

In Elk Grove, one of the hardest-hit communities in the region, a longtime business folded over the weekend: Elk Grove Brewery & Restaurant in the Old Town business district.

While the brewpub was hurt initially by extensive construction in the neighborhood, which curbed access to the site, ultimately the economy put the business under.

The Correa family, which bought Elk Grove Brewery & Restaurant in 2003, had to “turn it over to the bank and walk away, unfortunately,” said the brewpub’s attorney Matthew Eason.

The brewpub was hurting long before the credit crunch became front-page news. But the lack of financing is crippling those businesses that are trying to get off the ground.

Capital Funding, a North Highlands nonprofit that makes business loans, said it’s becoming increasingly tough to get deals funded. The firm teams up with commercial banks to arrange loans backed by the Small Business Administration.

“Across the board, fewer deals are being done, nationally, locally,” said Dennis Funkhouser, credit manager at Capital Funding.

He said two industries in particular are finding it difficult to borrow: health clubs and hotel-motel developers.

Credit is drying up for health clubs because lenders are nervous about businesses that depend on discretionary spending, he said. Hotels are problematic because the weakening economy is hurting travel.

“There’s concern about travel, vacations – will there be people out there at $4 a gallon gas, will families be going out on vacation? You wonder what the occupancy is going to be,” he said.