The owner of our firm held a large line of credit that he had used about 40% of. This was Pre-meltdown. He never missed a payment, and regularly made large payments of over 50% of the balance just for the heck of it. He doesn't like owing money in general.

Anyway, over the past two years, BOA slashed his available credit line in half, then in half again. On a credit line where he never missed a payment, never drew on the whole balance, and regularly paid well above minimum on the balance.

The great irony is that these last couple of years is when he needed it most. I won a couple of very high dollar amount jobs that required significant material purchases, and it decimated our cash flow. BOA and other lenders absolutely refused to restore a decent credit line, and the jobs I won were insured and bonded projects for government clients.

The current credit situation for medium and small businesses is absolutely hostile. Large financial institutions are holding back credit, and while I appreciate the show of prudence that was previously lacking, there is a big big difference between a mega-bank's exposure on bundled derivatives and a business with good credit that always pays on time.

It just makes absolutely no sense to me, nor to the owner of our org.