Barron’s thinks it might be. In a piece today, it reports on the troubles of Western Technology Investment, a San Jose-based debt financing company that’s been unable to agree on new terms with its own lenders, JPMorgan Chase and Deutsche Bank, and whose $125 million credit line will now expire at September’s end. “All the banks are doing is trying to get more liquidity,” CEO Ron Swenson told the paper, adding that WTI will now need to seek a new credit line at higher rates.
Likely, WTI won’t be the only debt-financing company hard hit by banks looking to shed securitized debt, and that’s bad news for the many startups that are using the loans to strengthen their balance sheets. Among WTI’s clients are Canopy Financial, which I wrote about on Friday (it has access to $6 million in debt capital); Aggregate Knowledge, a Kleiner Perkins-backed behavioral analytics company with $3 million in debt capital from WTI; and Like.com, a photo search engine backed by Leapfrog Ventures among others. Like.com has a $3 million commitment from WTI.