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credit crunch

Bank of America Cuts Off Credit to Some Small Businesses

The Bank of America  building is seen in Washington,DC on September 18, 2008. Markets were turbulent as they digested the AIG rescue amid anxiety about the state of the world financial system following the dramatic collapse on September 15 of US investment bank Lehman Brothers and the sale of Merrill Lynch to Bank of America. AFP PHOTO/KAREN BLEIER (Photo credit should read KAREN BLEIER/AFP/Getty Images)

Bank of America is severing lines of credit for some of its small-business owners and calling due full payment on existing debts. Absent that, the bank is offering businesses abbreviated repayment plans at high interest rates. According to a spokesman for the bank, which is attempting to raise capital and minimize risks, changes will apply to recipients of only a "very small percentage" of its 3.5 million non-mortgage loans. Happy New Year.

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Photo: Karen Bleier/2008 AFP