New York – CIT Group, a factoring company that provides
vendor financing to small and mid-size manufacturers, will no longer give loans
to Sears suppliers.
The move comes after
reported disappointing fourth quarter sales and announced plans to close as
many as 120 stores.
Sears told the Washington Post that while it disagrees with
CIT’s decision the impact will be minimal, as it affects less than 5 percent of
its outstanding inventory and other factors are still financing loans to its
suppliers.
Fitch Ratings said the CIT pullback represents an additional
liquidity concern for the retailer that reduces its margin of safety with
respect to cash needs.
Sears said it has $4.2 billion in liquidity, including about
$2.9 billion in revolving credit facilities.
