September 8, 2009
A Reuters article, "CIT Factoring Clients Have Few Alternatives," discussed the current status of CIT's factoring business. The reporters quoted partner James S. Carr, following CIT Group Inc.'s warning of the possibility of its filing for bankruptcy.
Factoring is the business of buying accounts receivable from companies in exchange for cash. The article noted that CIT Group's retail clients might not have many other options for factoring loans.
"'I still believe that it is a very profitable part of CIT's business. There is really no other alternative to turn to,' said Jim Carr, head of bankruptcy and restructuring at Kelley Drye & Warren in New York. Companies that lose access to these types of factoring loans--which run from a few million dollars up to $20 million or more--would face cash flow problems immediately, and that would mean more bankruptcies in retail, Carr said."
This article was also published by several news outlets including Forbes.com and Alibaba.com.