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View Diary: Bernie Sanders Asks Ben Bernanke About #OccupyWallStreet in Senate Hearing (68 comments)

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  •  One of the first things that seemed to occur (2+ / 0-)
    Recommended by:
    VClib, shaharazade

    in the meltdown was the lack of access to revolving credit for small businesses. There were reports of banks reducing lines of credit right and left.  Comments along the line of 'I have had a $100,000 line of credit with Bank A for ten years,and they just notified me that my new maximum is $30,000.  I have always kept current, and made monthly payments on time.  This has made it impossible for me to .....
    Many of those were for really small businesses, that used their line of credit to keep their bills current.  A large customer started taking 45 days to pay?  Borrow enough to stay current on your bills, until you get his payment. Your new line of credit maximum is only $30,000, and you are now overdrawn by $10,000.

    That said, you may be right.  But, because the banks were squeezing themselves by losing money in the mortgage markets, they had to squeeze out all they could elsewhere.  Elsewhere was the revolving credit lines that  small and medium businesses depended on.  

    Democrats - We represent America!

    by phonegery on Wed Oct 05, 2011 at 05:28:21 AM PDT

    [ Parent ]

    •  phonegery - I agree (0+ / 0-)

      I agree it is a real issue and the problem you described with small businesses having their working capital lines reduced can be catastrophic. However, there is no way for the Fed or Congress to reach down and deal with $100,000 lines of credit.

      "let's talk about that"

      by VClib on Wed Oct 05, 2011 at 07:13:19 AM PDT

      [ Parent ]

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