Comments Subscribe to Personal Liberty News Feed Subscribe to Personal Liberty
 

BofA Reels In Some Small Business Loans

CHARLOTTE, N.C., Jan. 3 (UPI) — Bank of America confirmed it was calling in loans from an undisclosed number of small U.S. businesses.

Analysts said BofA was attempting to raise capital and impress regulators.

BofA spokesman Jefferson George said the number of loans affected would be a “very small percentage” of the 3.5 million small business lines of credit it has on its books, The Los Angeles Times reported Tuesday.

George did not give a precise number of loans the bank was calling in. The bank also said small businesses were given a year’s notice, although some business owners said they did not receive the initial warnings, the newspaper said.

Barak Zahabizadeh, who owns a messenger service in Burbank, Calif., said he did not receive the early warning and has now been told he has to repay $96,000 by Jan. 25.

He was offered new terms on the loan, one of which was a two-year contract at 12 percent interest. That would increase his payments to $4,500 per month, tenfold his current payments, he said.

“I told them if they apply too much pressure they’re going to push me into bankruptcy,” Zahabizadeh said.

“If small businesses are going to lead the way out of the economic doldrums we now face in this country, they must have access to capital, not only to hire more people but to protect the jobs they are currently providing,” said Scott Hauge, president of Small Business California.

Industry analyst Paul Miller at FBR Capital Markets said BofA was attempting to raise capital and prove to bank regulators that it was willing to reign in risks.

“Bank of America is under great pressure, especially with another round of (federal) bank stress tests coming up,” Miller said.

“As the regulators say: ‘We want you to tighten up.’” Miller said.

UPI - United Press International, Inc.

Since 1907, United Press International (UPI) has been a leading provider of critical information to media outlets, businesses, governments and researchers worldwide.

Facebook Conversations

Join the Discussion:
View Comments to “BofA Reels In Some Small Business Loans”

Comment Policy: We encourage an open discussion with a wide range of viewpoints, even extreme ones, but we will not tolerate racism, profanity or slanderous comments toward the author(s) or comment participants. Make your case passionately, but civilly. Please don't stoop to name calling. We use filters for spam protection. If your comment does not appear, it is likely because it violates the above policy or contains links or language typical of spam. We reserve the right to remove comments at our discretion.

Is there news related to personal liberty happening in your area? Contact us at newstips@personalliberty.com

Bottom
close[X]

Sign Up For Personal Liberty Digest™!

PL Badge

Welcome to PersonalLiberty.com,
America's #1 Source for Libertarian News!

To join our group of freedom-loving individuals and to get alerts as well as late-breaking conservative news from Personal Liberty Digest™...

Privacy PolicyYou can opt out at any time. We protect your information like a mother hen. We will not sell or rent your email address to anyone for any reason.