As Meredith Whitney doth foretold…
Bloomberg: Almost three-quarters of U.S. companies with fewer than 500 employees are experiencing a deterioration in credit or credit- card terms at a time when half of them depend on credit cards as a primary source of financing, according to a December survey by the National Small Business Association, a trade group with more than 150,000 members.
The increase in credit-card costs has forced some business owners to stop using their cards, and at the same time declining credit limits are cutting their access to cash, said Todd McCracken, president of the Washington-based NSBA. 20-eight per cent of small businesses surveyed by the NSBA said they had their card limits or lines of credit lowered in the second half of 2008.
Bank loans are drying up as an estimated 70 per cent of U.S. banks have tightened standards for small-business loans, based on a Federal Reserve January survey of senior loan officers.