BofA won’t boost loans to McDonald’s

McDonald’s Corp., the world’s largest restaurant company, told some U.S. franchisees to seek other ways to finance store improvements after Bank of America Corp. declined to increase lending.

Store owners have exhausted the financing available to install latte and espresso makers and make other upgrades, McDonald’s said in a memo obtained by Bloomberg News. BofA won’t provide more money, the memo said, because it’s in the midst of acquiring Merrill Lynch & Co. and coping with the debt markets.

“Bank of America has been taking steps to increase capacity to fund additional growth,” McDonald’s Treasury Department wrote in a memo that was forwarded Friday by employee Pete Zelasko to franchisees in the Rocky Mountain region of the U.S. “Its announcement last weekend of its intention to acquire an investment bank and the volatility in the debt markets, especially this past week, have impacted BofA’s ability to get the quick solution originally anticipated,” the memo said.

“This is the first signal that turmoil in the financial markets is reaching McDonald’s,” said Richard Adams, a former McDonald’s franchisee in San Diego.

Zelasko didn’t respond to a request for comment. McDonald’s spokesman William Whitman declined to verify the memo’s authenticity and Bank of America doesn’t comment on specific customers, spokesman Scott Silvestri said.