Bank of America is closing credit lines of some business customers at the same time that they’re running an ad campaign about how they love small business.
Back in 2008, when the financial sector was melting down, I got dozens of calls from small businesses that were having their lines of credit instantly closed by a variety of lenders. Now we’re back to this scenario apparently with the nation’s largest bank.
Bank of America would not tell a Los Angeles Times reporter how many businesses they’ve done this to. But it’s happening to small business owners who were paying as agreed. They’re just being told they have to pay either today or within days. Their line is shut off and all the debt is suddenly due.
The sad thing is that Bank of America got hundreds of billions of dollars from us and they’re still not truly solvent. They’re morally and financially bankrupt. They only exist because of the kindness and generosity of taxpayers. This is just one more sign that the big banks need to be busted up. They have too much power and they’re too reckless.
For business owners, if you receive notice that Bank of America or anybody else shut down your line of credit, you may not have maneuvering room. But if you have an operating line of credit, run, do not walk, to open business lines for your company with a new bank. Get to a local community bank that specializes in lending to small businesses. If you can establish a relationship, then kick Bank of America to the curb.
Don’t wait until the hammer drops and your cash flow dries up. Then you have no move at all and may not be able to make it as an existing concern.
I’ve said it for years and I’ll say it again: It’s not a question of if a giant bank will mistreat you. It’s only a question of when. Be smart!