They are talking about financing during BK. So I would assume any small business that has been current is not going to have problem. No doubt small businesses are more than concerned, but it seems as if they are dealing with it.
Do not think they are going to get the bailout from Obama, however they are in talks with receiving some kind of help from some top name "banks" like goldman sachs. Talks are going on at this very second, there hoping to close some kind of agreement by tomorrow morning. If anything I say let the fall, they already borrowed $2billion+ and they are again looking for more money to survive. Even if they get the money they need I can guarantee they will be asking for more very soon.
Not really. The businesses in question have an addiction to debt and cannot survive with out it. They might as well go BK. The businesses dealing with CIT fall into two categories: 1) Uses factoring & credit lines, has a sound business model and can find another creditor or lender to replace CIT 2) Unsound business that is barely surviving off the credit (for the time being) backed by declining real estate. Most of the "businesses" crying are just retail mall strips that don't have the demand for them. Even during boom times, they were running on razor thin margins. It's time for them to go.
If you'd ever run a small business, you'd know how off base your comment is. Any business relies on the free flow of banking funds and credit to help finance daily operations, buy inventory, pay vendors, pay salaries, etc. etc. etc.
Most of these business have open lines of credit which will be closed when CIT goes under. Businesses use these lines of credit to purchase inventory, materials, meet payroll obligations, and other operational purchases. We have witnessed the credit to all of our local small businesses being cut by banks in the last months; credit card accounts have been terminated and lines of credit greatly reduced. All the impacted businesses have always paid their bills on time and been in business for over 5 years with sound business models. If CIT goes under these businesses will not find any alternative financing in the current credit environment. Most will simply have to fold leading to main street desolation.