CIT Announces It Will Keep Lending

Posted by MCC on November 17th, 2009 at 07:00am

Although CIT Group filed for Chapter 11 bankruptcy on November 1, it’s been announced that business will go on as usual for it’s factoring arm. The group filed Chapter 11 as an effort to erase billions of dollars in debt with almost 90 percent of the debt holders voting to chose bankruptcy over debt exchange.

CIT is a major factoring lender in the furniture industry which lends to companies based upon accounts receivable. It’s a key source of lending to small and midsized business. And, has stated that none of the operating subsidiaries were included in the Chapter 11 filing.

The lending group expects to continue operating and be out of Chapter 11 by the end of the year and to cut it’s debt by around $10 billion. It also hopes to reduce liquidity needs and enhance capital ratios to accelerate a return to profitability.

According to reports, the United States Treasury Department is expecting to recover very little, if any, of the federal bailout money that CIT received in the amount of $2.3 billion.

Under Furniture News