Advanta, a lender that specializes in providing credit to small businesses, announced today that it is retracting all of it lines of credit to small business owners.
The root of Advanta's problems stems from its need to re-pay the principal on bonds sooner than expected. In short, Advanta no longer has investor capital to lend to small businesses.
Ironically, Advanta was offered TARP money last year, but declined saying their balance sheet was in healthy shape.
This is the largest cancellation of lines of credit in recent history, and will affect more than 1 million small businesses.
Read the actual letter that Advanta sent to its employees on May 11th at the consumerist website.
Monday, June 8, 2009
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