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Old 10-27-2009, 09:48 AM
26,867 posts, read 42,186,524 times
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(Reuters) - Recent bankruptcy filings by small U.S. businesses show a trend that could complicate lenders' efforts to identify at-risk borrowers, a new study reveals.

PayNet Inc, which provides analytic tools to the commercial credit industry, looked at 750 small business bankruptcy filers and found 50 percent were current with one or more of their lenders when they threw in the towel and sought protection from their creditors.

"Approximately half the lenders never saw it coming," PayNet President Bill Phelan said. "They were blindsided."

The 750 companies PayNet studied collectively owed $58 million in loans, leases and lines of credit -- a tiny fraction of the 100,000 small businesses that PayNet said have filed for bankruptcy over the past year with an estimated $10 billion in obligations outstanding.

But the speed and silence with which so many of them went under marks a phenomenon that is deeply worrying to lenders, who historically have managed default risk by closely monitoring delinquencies.

Report finds new wrinkle in U.S. bankruptcies | Reuters

These small business owners aren't going to hire any one soon......
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