CIT's Failure A Wake-Up Call For Small Companies

wsj.com:

he troubles at CIT Group Inc., a key lender to small businesses, underscore the importance of developing back-up plans for borrowing.

CIT's financial struggles, which have sent manufacturers and retailers scrambling for alternative sources of credit since they came to light, are a stark reminder for all small business owners not to put all their eggs in one borrowing-basket. If they haven't already, entrepreneurs should be considering loans from credit unions and exploring financing programs backed by the federal or local governments.

Read the whole story: wsj.com

Comments

[vote you]

We need to stop the corruption by Goldman, bank of Amerika, and Jp Morgan. Stop the Geithner and bernanke. . Obama's policies may not be working as well as many had hoped:

1st 100 days - There are 2.9 million more people unemployed in May than there were unemployed in January. The unemployment rate went from 7.6% to 9.4%.
Since May 2008, we have lost 5.5 million jobs.
The biggest losers were: Manufacturing 1.5 million lost Finance
& Prof Serv 1.5 million lost
Construction 1.1 million lost
Retail & Leisure 1.3 million lost

good articles: http://www.iamned.com

[pfrogger]

Gullible peons.
The pretty rhetoric is for the fools. Look at the actions as a true indicator of beliefs.
The US government is happy to continue bailing out big financial structures. These bailouts in no way helped the average American. Lending dropped. Lower-tier personnel were fired in droves. The bailout capital was used to either secure their position, or pay of bad debts to other big businesses, or to buy struggling competitors. None of this helped the average American. In fact it hurt them. Now instead of a few too-big-to-fail entities, there are even more. Any doubt they will also be bailed out if required?
The bailout was also used to massively lobby Congress to prevent regulations, prevent credit card interest caps or any serious credit card regulation, and to prevent mortgage renegotiation.
None of the safety regulations, such as Glass Steagall, have been put back into place. So another financial crisis can easily happen again.
The actions show a complete disregard for basic financial understanding. How many times must greed run rampant for short term gain and long term crisis before it gets through? It doesn't matter. The masters of the universe made a killing through the crisis. And they will do so again when they cause another one in 10-15 years.
It's the money stupi.d.

[truthtimeisnow]

CIT could not be more important to small business owners. It's failure could have meant nearly 300,000 small and medium sized business closures. Where was the Obama Administration, when small businesses needed help?

[drymartini1]

CIT just had 3 billion in emergency loans approved by its bondholders just a few days back.

[Wendy Davis]

During the facade called a housing boom, retailers moved from our local mall into new digs, all of the finer details included, the right side of town. So what do we have now? Empty malls save for teen stores. And the new property wasn't able to be held onto because we all stopped shopping about 3 months after then moved into their new address. Just brilliant...this is beyond the brink of disaster. Bernanke and Paulson did nothing but lip service. Laughing and jostling each other when their mics were turned off, talking about anything but the economy obviously. How could an American laugh while discussing what has transpired (or wil transpire - A dollar bill worth a nickle< high interest rates< ruined FICO scores and jobs which just barely cover the rent>

[PhilipTaylor]

A Federal Agency in our Government, the 0ffice of the Comptroller of the Currency, 0CC, issues a quarterly Report that has the following info:

1 JPM0RGAN $81TRILLION in Toxic Derivatives
2 B 0F AM $78TRILLION
3 G0LDMAN $48TRILLION
4 M0RGAN $39TRILLION
5 C1T1GROUP $32TRILLION

http://www.occ.gov/ftp/release/2009-72a.pdf
It is on page 23!

CITIGROUP wants MORE TARP!

Glass-Steigel them!

Divide them up and get rid of the JUNK at the expense of the Stakeholders!

Bye Bye TOO-BIG-TO-FAIL!

With $32 TRILLION of Toxic Derivatives Hidden "Off-BALANCE-SHEET" why save them or any of these WS MAMMOTHS who have OUT-LIVED their TIME! Only We11s has a tolerable amount of such DEBT!

When did it sound like a good idea to have "OFF-BALANCE-SHEET" accounting? Wasn"t this an invention by the ENR0N Accountants Arthur Anderson to hide the corrupt practices of ENR0N? Why is the ENR0N L00PHOLE still legal? AND Why is Wall Street still using it to hide their FAKE ACCONTING?

[TJCole]

We blew it, when we failed to Nationalize these failed corrupted banks...!

[PhilipTaylor]

MarketWatch July22: Goldman announces U.S. made 23% return supporting bank!

Goldman was forced into paying the PRE-PAYMENT PENALTY just like the REST OF US Americans!

It took a lot of PRESSURE but they finally did it!

Now they will act like they were patriotic and are take a BOW!

We KNOW ALL YOUR TRICKS G0LDMAN!

[PhilipTaylor]

If you include the $13 Billion Treasury slipped through the Back Door of AIG to make Goldman WHOLE on its Credit Default Swaps?

Then Uncle Sam looks to have lost around 53% on the Deal!

[ThePeacemakers]

And they fully expect the Treasury to pay off the Credit Default Swaps for the outstanding trillions in "toxic deriviatives" still out there...

Hence, they want small biz to fail, homeowners to fail...

Unemployed? No dollars?

They fully expect to hire again...the few monoliths out there. But no telling what will be required of you to become "liquid" again.

[KillTheMessenger]

If your business needs credit to operate, you are deep into the danger zone, already. No healthy business needs credits. Only startup businesses do. And sometimes even they do not.

[Jaywalkker]

Businesses regularly do short term business loans, of a day, a week, a month or 1/4. That was why the economy seized last fall, "no lending" didn't necessarily mean, that you couldn't buy a car and I was turned down for a school loan, it means banks weren't lending to other banks or businesses that needed to cover a short term deficit to make an order.

[KillTheMessenger]

"Businesses regularly do short term business loans, of a day, a week, a month or 1/4."

And that's why many of them are in trouble. There is absolutely no financial upside to a short term business loan vs. keeping enough liquid working capital on the bank. Well, of course there is... to the bank. Otherwise they wouldn't give it to you to begin with.

"That was why the economy seized last fall..."

The economy didn't seize... only the sectors funded by credit did. Which is exactly the points of my criticism. Why make yourself dependent on credit when there is really no need to?