General Electric is a symbol of American business to the world, Warren Buffett declared yesterday as it was announced that he would put $3 billion into the company as part of a $15 billion fundraising.

It is that symbolism that makes the news so striking. When even GE needs a few bob, you know things are bad.

This is not, however, really an example of how the credit crunch is spreading to the industrial world. GE is half a financial services company, and it is that side of the business that is really struggling. GE finances its lending through the wholesale markets, including the commercial paper market, in which funding has dried up, even for this symbol of American business.

The better evidence of the spreading impact of the credit crunch came from Mick Davis, the multimillionaire head of the Xstrata mining group. He said yesterday that he was scrapping a £5 billion takeover bid for Lonmin, the platinum producer, after failing to secure debt on sufficiently attractive terms. The few bankers capable of finding £5 billion to lend to Xstrata had offered their money with numerous strings attached, including a demand to refinance within one year.

Mr Davis took the view that with the financial sector in meltdown, he could not risk refinancing so soon - after all, who knows how bad things might be in a year?

Mr Davis's deal-making successes over the past decade have made him a banker's favourite. And Xstrata is hardly a risky borrower. It had an operating cashflow of $4.5 billion in the first six months of this year and is generating profits of more than $1 billion a month. What hope do other companies have of raising money when Xstrata cannot secure favourable enough terms?

The bid by BHP Billiton, the world's largest mining company, for Rio Tinto will also be affected by the credit crunch. BHP arranged a $55 billion debt facility last year but bankers say the cost of borrowing this money could be double what it originally expected.

Of course, as a wily deal-maker, Mr Davis may be using the credit crunch as an excuse to drop the Lonmin bid. Estate agents are discovering that potential buyers are walking away from agreed house purchases, claiming financing problems when, in fact, they are waiting for a further fall in property prices. Is Xstrata doing the same?

The price of platinum has fallen by half in the past three months and Lonmin's share price has collapsed as a result. Removal of the Xstrata bid yesterday led to a further 20 per cent fall and the shares closed at £18.13, against an offer price of £33.

Mr Davis took the opportunity to increase his stake in the platinum miner from nearly 11 per cent to 24.9 per cent at an average price of £19.79, a big saving on what he would have paid if the £33 offer had been accepted. Undoubtedly, there are benefits to walking away, but Takeover Panel rules mean that Mr Davis cannot return to the Lonmin bid for at least six months. In that time Lonmin may seek a friendly deal with someone else or the price of platinum could rebound, making the original £33 bid look cheap.

Mr Davis would be unlikely to risk losing Lonmin if the credit crunch had not made a bid so unattractive.

Funding a huge acquisition is one thing. But companies are also saying that banks are reneging on promises to lend at agreed interest rates even on ordinary facilities. Even the safest utilities are struggling to raise cash on attractive terms.

They had better hurry up with those bank bailouts or we are all going to sink.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive