Advanta files for bankruptcy -- more bad news for small-business borrowers
Filed under: Economy
A deep recession isn't a great time to be in the business of lending to entrepreneurs. First CIT Group had to seek bankruptcy protection last month when it failed to strike a deal with bondholders to rework its debt. And now Advanta (ADVNB), a credit-card company specializing in lending to small-business owners, will follow, it announced today.The news comes five months after Advanta cut off borrowing by its cardholders, citing a surge in delinquencies. It's still hoping to collect $2.7 billion in balances from 360,000 customers.
"The economic debacle over the last two years devastated Advanta's small-business customers and Advanta itself," said Advanta CEO Dennis Alter in a statement.
With small-business bankruptcies up 44 percent in the third quarter compared with a year earlier, according to Equifax, it's no surprise that the companies that help finance their operations are getting hit hard.
Many banks are pushing entrepreneurs who want to borrow into credit cards and away from traditional loans. The federal Small Business Administration found that small-business bank loans of up to $1 million grew just 4% last year, compared with a 6.8% expansion in loans up to $100,000, thanks largely to "continued efforts to promote small-business credit cards by credit card issuers."
In that light, Advanta's plight has been particularly painful.
Advanta's bankruptcy filing says it has $363 million in assets and $331 million in liabilities, and covers 14 of its business units. Not included is the company's bank, issuer of its small-business credit cards, which won't be affected by the filing.
That doesn't mean the bank is out of danger. Advanta warned that the institution's capital has fallen below the level required by its regulators and could be seized and placed into receivership with the Federal Deposit Insurance Corp., after which it would likely be taken over by a healthier rival.
Advanta isn't bolstering the bank's reserves to "preserve value" for bondholders during its bankruptcy reorganization, it said in the statement.
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Reader Comments (Page 1 of 1)
11-09-2009 @ 6:55PM
Dereck Dodson said...
The "REAL TRUTH"
The World Fortune has "Appropriated", "Garnished", and "Consumed" the entire Finance Industry Worldwide in a Maryland District Court Case with the FDIC regulation "No failing Bank can Merge with another failing Bank".
There are no Civilian "Taxpayer Dollars" involving "Base Financing" in any World Fortune Government Owned Corporations or Businesses. There are only "World Fortune Owner Tax Dollars". The World Fortunes Government Owned Corporations and Businesses pay Taxes to the 99th Percentile Worldwide. Don't be mislead by the Media's articulation and terminology. "Tax Diversion Operations" are the only reason the World Economy is breathing any life right now. The Government will "shrink and dissolve" until Private World Fortune Corporations organized with Colleges and Universities run all Federal, State, County, and City Operations effectively killing dirty politicians "Red Tape".
Every Investment Bank (including CIT and US Bank), Bank, Credit, Loan, and Finance Company lost the ability to use my money, therefore all Monetary Collection Accounts from all my World Fortunes Government-owned Corporations and Businesses have been "Levied" and are being routed to my Garnishment Payments.
All the lies being told by Media Reporters and Columnists are the total cause of all the "holdup". Government Regulatory Agencies are at fault for not utilizing the "Truth in Media Act" that Congress spent all that time passing.
The World Fortune is moving to completely end "World Poverty" and the "ponzi schemers" are attempting to "bribe and blackmail" their way into a blockade of this with their criminal "political figureheads".
The Maryland District Court Cases can be Tracked on the world wide web at:
Courts.State.MD./District under "Case Search"
Case Number.: 0502-0007498-2008
CACH LLC (Bank Of America) vs Dereck T. Dodson
0502-0035887-2007
Chase Bank USA, NA vs Dereck T. Dodson
0502-0002668-2009
Wharton Enterprises (Advanta Bank) vs Dereck T. Dodson
All cases are awarded "In favor of Defendant", "Dismissed with Prejudice", and Deleted.
The Finance Industry was already "Privately Owned" by me and will pay out this Appropriation and Garnishment forever under this Court Ruling.
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11-11-2009 @ 1:34PM
Rina said...
They may be getting hit hard, but we're getting the blows. It's very tough to build strong business credit these days and without big guys like Advanta, small business is extinct.
Rina
Initial Underwriting Group
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