Circuit City’s woes have been picked up by my colleagues at bnet.com where I help write two blogs.

David Phillips, writer of the “10-Q Detective” blog, notes Circuit City’s expanding woes since credit consulting firm Bernard Sands no longer recommends Circuit City to vendors.

As Phillips notes, at the end of August, the electronics retailer had cash of about $92.5 million, down from $297.4 million at the end of February. The firm has a credit facility for which it can borrow $795.4 million to top up its inventories as the holiday buying season approached.

But continuing doubts about Circuit City’s viability, coupled with Sands downgrade, could mean suppliers of digital cameras, LCD televisions and home theaters could choose not to  supply the Richmond-based firm or dramatically change their sales terms.

Phillips quotes  from Circuit City’s second quarter !0-Q report:

“The company understands that the decisions that its vendors make with respect to the company may depend on factors that include their specific economic situations, the company’s risk profile and other factors, such as the availability of adequate credit insurance or their ability to factor their receivables from the company. At any time, a vendor could change either the availability of vendor credit to the company or other terms under which it sells to the company, or both … Significant changes in the credit limits or payment terms that the company has with its vendors or the incurrence of additional losses beyond its current expectations, however, could adversely impact the company’s liquidity.”

Ouch!