CIT to stop financing loans for Sears suppliers

Sears confirms that CIT Group will stop financing its suppliers, but downplays the impact

Associated Press

HOFFMAN ESTATES, Ill. (AP) -- Sears says that CIT Group Inc. has decided to stop financing loans to suppliers waiting to be paid by the retailer.

But Hoffman Estates, Ill.-based Sears Holding Corp. says the decision won't have a big impact on its operations. It says that CIT's payable represented less than 5 percent of its inventories.

New York-based CIT Group Inc., which makes loans to small and mid-size businesses, says it doesn't comment on specific customers.

Sears says it disagrees with CIT's decision, noting that other lenders are still financing the loans. It also pointed to its $4.2 billion in liquidity, along with its recent restructuring moves and cost cuts.

But last week, the company said it expects its fourth-quarter profit to be half of what it was last year.

Sears shares fell 2.7 percent to $32 in morning trading Wednesday.

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