CIT Reportedly Stops Backing Sears Supplier Loans

By Salon Staff

Published January 12, 2012 4:18PM (EST)

HOFFMAN ESTATES, Ill. (AP) — CIT Group has reportedly decided to stop financing loans to suppliers waiting to be paid by struggling retailer Sears.

The decision was initially reported by Bloomberg, which cited two people familiar with the situation.

Hoffman Estates, Ill.-based Sears Holding Corp. wouldn't confirm CIT's decision but says it disagrees with it. It says it won't have a big impact on its operations and that CIT's payables represented less than 5 percent of its inventories.

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

Sears says other lenders are providing loans to its suppliers and points to its $4.2 billion in liquidity, along with its recent restructuring moves and cost cuts.

In morning trading, Sears shares fell 4.6 percent to $31.39.

Salon Staff

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