CIT Group, the New York-based lender that filed for bankruptcy protection Sunday, has made a handful of loans totaling millions of dollars in the Wichita area in the past few years, according to a Small Business Administration official.
CIT said its lending operations will continue as it proceeds through Chapter 11 bankruptcy reorganization with the hope of shedding $10 billion in debt.
Chairman and CEO Jeffrey Peek said the company's prepackaged reorganization plan "will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy."
Wayne Bell, district director for the SBA's Wichita district office, said CIT, which provides 7(a) and 504 SBA-backed loans, has made seven loans in the Wichita district in the past three fiscal years: one $1.1 million loan in 2009; two loans totaling $565,000 in 2008; and four loans totaling $3.6 million in 2007.
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Bell said Monday that he isn't certain what effect the bankruptcy will have locally.
"Internally we haven't received any notice that this impacts us," he said.
CIT also operates an aerospace unit that focuses on aircraft leasing and financing. It wasn't clear Monday whether that unit did much, if any, business in Wichita.
CIT's bankruptcy filing is one of the biggest in U.S. corporate history, following Lehman Bros., Washington Mutual, WorldCom and General Motors.
The bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion. The move wipes out current holders of its common and preferred stock, meaning the U.S. government likely will lose the $2.3 billion in taxpayer funds it sunk into CIT last year to prop up the company.
CIT had struggled to find funding as sources it previously relied on, such as short-term debt, evaporated during the credit crisis. The company pulled back sharply on lending to businesses as it tried to preserve cash.