Small Business Lender in Danger of Bankruptcy

Photo by Hroch

CIT, a major small business lender, is facing financial woes and the Obama administration is reviewing the records to determine if it is worth rescuing. The company has about $75 billion in assets and 94% of its stock has lost value since the beginning of 2008. The administration is concerned because thousands of troubled small businesses could fail as well.

Its credit rating has been slashed by all three firms because of growing concerns over its ability to liquidate assets. The FDIC has also restricted the company from selling debt to investors, as they are unsure of the viability of CIT. If CIT defaults, the FDIC would have to pay the investors.