For company owners and CEOs, “March Madness” has a double meaning. There’s the “March Madness” most of us are familiar with, where the “best” 64 college basketball teams go head to head to determine who’s the best.

Then there’s the other “March Madness.” And it’s not nearly as fun. This is the month when companies open their books, year-end audits, and budget forecasts to lenders. When times are good, as they have been until fairly recently, it’s not such a big deal. But when times are tough and a company’s numbers and projections aren’t looking so good, lenders are more likely to lower the hammer.

That could mean anything from forcing a major restructuring … to forcing companies to accept new loans with onerous terms … to finding a buyout partner. It also means banks will be more inclined to leave companies in the lurch. Moody’s Investors Service has projected corporate defaults jumping to 5.3 percent in 2008, up from less than one percent in 2007.

Investors need to be on their toes. Companies with banks that have run out of patience could also see their shares fall. How much and how fast depends on how hard the banks are coming down on them.

What’s more, it could easily bring more downward pressure on the markets, as if they need any more. This year, March could beat out April as the “cruelest month.”