Impending Credit Crunch Threatens Small-Town America with Bankruptcies and Defaults

Signs of corporate distress are mounting in the US, with small businesses reporting difficulty in borrowing, corporate debt trading at distressed levels surging by 300% over the past year, and bond and loan defaults ticking up. The Federal Reserve says banks have tightened lending standards, and corporate bankruptcies are on the rise, particularly in the construction and retail industries. Analysts anticipate more companies will default on debt as lending standards are tightened and the Fed's rate hikes keep rippling through the economy.