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.