CIT We may go bankrupt

//October 2, 2009//

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Troubled lenderÂs announcement could create more credit-crunch problems.Small-business lender CIT Group Inc. may file for bankruptcy, potentially narrowing the already constricted pipeline for commercial financing.

In an Oct. 2 filing with the Securities and Exchange Commission, the troubled global finance company noted that it may file for a Chapter 11 restructuring, or it could liquidate if lenders balk at either accepting new notes for more than $5 billion of debt or agreeing to convert much of the debt to equity in the company.

CIT, which has a significant administrative operation in Livingston, reported a $1.6 billion loss in the second quarter of 2009, compared to a $2.1 billion loss in the year-ago quarter.

CIT has about 22,000 commercial clients in New Jersey, although its share of Small Business Association-backed loans has been steadily falling.

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