Posted on November 4, 2009 - by Martin Lee

CIT Group Files for Bankruptcy

Photo by Ernst Moeksis

I was interrupted yesterday morning with news that CIT Group, a commercial lender to hundreds of thousands of small and medium-sized businesses in the US, filed for bankruptcy (Note CIT is not the same entity as CitiGroup) on Sunday.

CITCIT’s bankruptcy has been partially expected as they have been repeatably trying to raise more and more capital for the past few months without much success. With a default rate in excess of 10% in their current loan portfolio, it appears that SMEs are still in pretty much of a struggle, never mind what the economic numbers say.

While this seems like just another bank failure out of the 115 that have failed in US so far this year, note that this is the fifth largest bankruptcy in US history, behind Lehman Brothers, Washington Mutual, WorldCom and General Motors. Read more…

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