Lending Shift

CIT Group, a giant small business lender, filed for bankruptcy in 2010 which will cost the taxpayer over $2 billion in bailout funds. CIT’s bankruptcy is the fifth largest in U.S. history, carrying over $71 billion in assets.

How are downfalls like this changing the lending-financial markets?

First U.S. Finance continues to contract with 3 distinct lender groups: credit-based equipment lenders, private equity groups and asset-based lenders, which are still strong and active in funding business expansions and equipment acquisitions. I have actually increased my ability to finance certain niche markets including:

1. Financing retrofit lighting projects, construction build-outs and upgrades from $20K and up, throughout the entire United States.
2. Financing specialty industrial machines and microelectronic assembly equipment including customized (one of a kind) pieces of equipment.

The shift in the lending market requires that almost all finance requests be presented with a full financial package, which includes tax returns, financial statements and personal financial statements. The change adds a layer of security for the underwriters and lenders which evaluate the risk of each new lessee. Lenders want to know whom they are dealing with and the purpose of the financed equipment or project. Companies and business owners have to provide more paperwork than in prior years but they are still getting funded every day.