Advanta files for bankruptcy -- more bad news for small-business borrowers

A deep recession isn't a great time to be in the business of lending to entrepreneurs. First CIT Group had to seek bankruptcy protection last month when it failed to strike a deal with bondholders to rework its debt. And now Advanta (ADVNB), a credit-card company specializing in lending to small-business owners, will follow, it announced today.

The news comes five months after Advanta cut off borrowing by its cardholders, citing a surge in delinquencies. It's still hoping to collect $2.7 billion in balances from 360,000 customers.