January 12, 2012 / 4:20 AM / 7 years ago

CIT to halt loans to Sears suppliers - report

Jan 11 (Reuters) - CIT Group Inc will no longer provide loans to Sears Holdings Corp suppliers to finance their shipments to the retailer, a Bloomberg report said, citing two people familiar with the matter.

CIT Group, the business lender run by Wall Street executive John Thain, will no longer approve credit for orders after today, the report said, citing unnamed sources.

At the end of December, Sears had about $4.2 billion of liquidity, including cash balances of about $0.9 billion, Sears spokeswoman Kimberly Freely said in an email to Reuters.

“We disagree with their (CIT’s) action, in fact we’d point out that other factors are approving shipments to Sears Holdings and CIT’s payables represented less than 5 percent of inventories,” Freely said.

The news comes within days of Hoffman Estates, Illinois-based Sears posting disappointing holiday sales numbers, and announcing the closure of as many as 120 stores.

CIT could not be reached immediately for a response.

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