U.S. bankruptcies just reversed course and started rising again.
Too bad one of small businesses’ major lenders, CIT, just went bankrupt as well.
Regions where CIT was strong could see credit particularly restricted, despite CIT’s best efforts to continue servicing customers.
WSJ: Business bankruptcy filings jumped in October, reversing two consecutive months of declining commercial filings and indicating that bankruptcies could continue to rise as the economy struggles to stabilise.
Last month, 7,771 businesses filed for bankruptcy protection, compared to 7,271 that sought shelter from creditors in September, according to data from Automated Access to Court Electronic Records, a private firm that tracks bankruptcy filings.
After two months of decline, the 7% rise in commercial filings shows that businesses are still struggling to access financing and are facing weak demand for their products.
Even some successful businesses can’t get the necessary financing.
Press of Atlantic City: This week’s bankruptcy of New Jersey-based small-business lender CIT Group points to another difficulty: Even small businesses that can sell products and services in the recession are struggling to find the credit needed to launch and continue operations. Joel Naroff, chief economist at Naroff Economic Advisors, said Monday that banks are still “fairly reluctant to lend across the wide range of firms.”