Here we are in a new year and there are signs of hope for access to capital for small businesses…unless you are a customer with Bank of America.
First the good news.The Thomson Reuters/PayNet Small Business Lending Index showed that in November lending to small business hit its highest level in nearly four years. According to PayNet founder, Bill Phelan, this is also good news for the economy. "Businesses are betting on the future with increased investment spending."
But if you have a small business line of credit or are trying to get one with Bank of America, your economy might not look so good.
According to a story today in the Los Angeles Times:
Bank of America Corp., under pressure to raise capital and cut risks, is severing lines of credit to some small-business owners who have used them to stay afloat.
The Charlotte, N.C., bank is demanding that these customers pay off their credit line balances all at once instead of making monthly payments. If they can't pay in full, they are being offered new repayment plans for as long as five years, but with far higher interest rates than their original credit lines had.
And it’s not just Bank of America that has called small business bank loans on clients who have not been late on payments. Back in November the owners of Hot Dog Heaven in Woodstock, GA, were victims as well. But fortunately for Becky and Barney Wentzel, the public furor over being treated so poorly by Ameris Bank, regardless of their perfect payment history, resulted in them and the bank reaching an agreement.
Let’s hope that the personal stories of Bank of America’s targeted small businesses also generate the needed negative publicity for that financial giant.