Wednesday, February 25, 2009

Local Business Says Bailed Out Bank Won't Lend

A family run business here in Chicago was hoping the bank bailout would have solved its problems with Bank of America - keeping both parties out of court. It hasn't. As CBS 2's Vince Gerasole reports after six decades, the family may be forced to close up shop.
Now their once successful business, La Guadalupana, is on the verge of financial ruin. They blame a bailed out banking system unwilling to give credit to Main Street America.

"We can't be the only ones that the money is not getting where it was intended to go," Castro said.

These are the ingredients of the family's financial troubles:

They claim, in 2007, Bank of America encouraged them to use a $400,000 line of credit to finance the purchase of a similar plant in Ohio - promising a business loan in a few months that never materialized, and then canceling their complete line of credit last summer - making the Castros unable to pay their bills.
Last fall, Bank of America contacted La Guadalupana's clients demanding payment be made directly to them and not the company.

But not everyone receiving the letter paid the bank; in fact, many didn't in support of their neighborhood business.

Attorneys for the company say Bank of America has since received $45 billion in bailout funds from Washington, but has been less than willing to work out a new deal with the Castros.
In a written statement, Bank of America said it "does not discuss its clients", adding "we try to work with borrowers because we want our clients to succeed."

Clients like the Castros struggling to hold on to the family business. 
Tough times!

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