The shit is about to hit the fans, folks. Hang on to your jockstraps. Bankruptcy trend among small firms stuns lenders. http://toledoblade.com/apps/pbcs.dll/article?AID=/20091021/BUSINESS07/910210315/-1/BUSINESS Article published October 21, 2009 Bankruptcy trend among small firms stuns lenders REUTERS CHICAGO - Recent bankruptcy filings by small U.S. businesses show a trend that could complicate lenders' efforts to identify at-risk borrowers, a study reveals. PayNet Inc., which provides analytic tools to the commercial credit industry, looked at 750 small business bankruptcy filers and found 50 percent were current with one or more of their lenders when they sought protection from their creditors. "Approximately half the lenders never saw it coming," PayNet President Bill Phelan said. "They were blindsided." The 750 companies PayNet studied collectively owed $58 million in loans, leases, and lines of credit - a tiny fraction of the 100,000 small businesses that PayNet said have filed for bankruptcy over the past year with an estimated $10 billion in obligations outstanding. But the speed and silence with which many went under is worrying to lenders, who historically have managed default risk by closely monitoring delinquencies. However, some borrowers refuse to telegraph their distress before they throw in the towel. "They pay and pay and pay," Mr. Phelan said, "and then they file for bankruptcy."