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 There has been a slew of media reports regarding the possible CIT Group
Inc. (NYSE:CIT) bankruptcy filing and how deep of an impact it would have on a
variety of industries. And yet the message from the Obama administration seems to be that CIT is just too small to save.In some cases, CIT the philanthropist could be sorely missed. According to a Reuters story, cultural institutions in New York, such as the Metropolitan Museum of Art, the American Museum of Natural History and the New York Public Library, and hundreds of other arts organizations might even suffer because CIT has been a major donor. "If it does come to pass, it will have a negative affect across the nonprofit sector and specifically the arts sector," Will Maitland Weiss, head of the Arts and Business Council of New York, told Reuters. As a factoring firm, CIT's disappearance would create quite a vacuum. About 60% of apparel and footwear companies in the U.S. often have factoring agreements with CIT, which provides the companies with financing based on their accounts receivables, the American Apparel & Footwear Association told Crain's New York. According to the Crain's story, CIT's clients include Trina Tirk and Marc Ecko. Sports financing would even be affected if CIT were to go bankrupt, a second Reuters story said. CIT has arranged financing for a number of hockey, basketball and soccer teams in the U.S., Canada and England. Some of the teams CIT has provided loans to or arranged loans for include the New Jersey Devils, the Edmonton Oilers, the Ottawa Senators and the Nashville Predators, the story said. A sports management professor at New York University, Robert Boland, told Reuters "it's going to hurt at the edges and it's indicative of how little capital will be available for sports owners, especially if they want to do any kind of refinancing or take on additional debt." Then there's all the equipment-leasing financing and other credit services that CIT provides to small companies, some mom-and-pop operations, around the country. The same nation whose economy is still fragile, where unemployment continues to rise. Small businesses, by the way, are the engine for job growth in the U.S., not Microsoft Corp. (NASDAQ:MSFT) or other corporate behemoths. And that engine is about to lose the oil -- the financing -- that keeps it running. But CIT isn't Bear Stearns Cos. or American International Group Inc. (NYSE:AIG) or Citigroup Inc. (NYSE:C) and all the other participants in the government's Troubled Asset Relief Program, including Goldman, Sachs & Co. (NYSE:GS). It's just the asset-based lender that Main Street often turns to. - Jamie Mason
CategoriesComments
From: jonathan,
Just to confirm further how many giant businesses have failed during the recession. I hope they can survive though. Thank you.
Posted on:
July 19, 2009 9:16 PM
From: mlgreen8753,
I had a friend who worked for them. She built her entire career around her job and now it's gone. It's a shame. Business are hurting more than ever but there seems to be a movement of more support for entrpreneurs with sites like http://www.adwido.com coming to the rescue to offer inexpensive business solutions.
Posted on:
July 22, 2009 6:53 PM
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When we lose a bank like this it just shows how badly the President is treating small business in this new climate of change. Small business is the largest employer in the country and is being eliminated by programs geared towards Government and Union jobs. What a shame Obama is just as big a liar as he claimed the previous President of being.