The fight for small business credit is getting tougher. CIT, historically a top financer for small firms, faces potential bankruptcy. For more than six months, CIT has virtually ceased making new loans –leaving business owners with few options.
The CIT situation is tricky for President Barack Obama and his economic advisors: the White House does not want to bail out every struggling company and CIT needs about six billion dollars after reporting eight quarterly losses in a row. However, refusing the small business lender may appear like the Obama administration is turning its back on small business.
The collapse of CIT will have a huge impact on supply chains. CIT serves as financial middleman to about sixty percent of retailers…..more than three hundred thousand businesses nationwide.
About fifteen million Americans work in retail trade, more than ten percent of the labor force. But impact of the CIT bankruptcy doesn’t end with job loss; it could mean poorly stocked shelves for the upcoming winter holidays because retailers’ credit and supply chains would be disrupted!