This Bloomberg article gives you just about all you need on where CIT is right now (as in: not a good place). There's some financial mumbo-jumbo, but the bottom line seems to be that CIT is on the brink of bankruptcy, and even the reported $3 billion lifeline it's worked out with its bondholders might not be enough to save the company. Here are some choice lines that underscore why this is a big deal:
The cash shortage has forced CIT to cut back its lending. In the quarter ended June, CITâ€™s loans to small businesses plunged 88 percent to $65.7 million and the company fell to 15th in the category from first a year earlier, according to the La Canada, California-based Coleman Report. CIT finances about 1 million businesses from Dunkinâ€™ Brands Inc. to Eddie Bauer Holdings Inc.There are already a small number of lenders who "get" security. CIT was one of them. Now it seems they won't be one of them going forward.
CIT has said a bankruptcy would put 760 manufacturing clients at risk of failure and â€œprecipitate a crisisâ€ for as many as 300,000 retailers, according to internal documents.The retail market is already terrible, though a large one for security companies. This could have a further negative impact on that market sector, meaning there won't be a whole lot of new surveillance systems going in. Of course, this credit collapse is bad for the economy as a whole, but the security industry stands to be impacted considerably by a CIT collapse.