In another move to keep bankruptcy at bay, small business lender CIT Group Inc. announced today that it is suspending dividend payments on some of its stock to improve liquidity and preserve capital.
The suspended dividends are for the company's four series of preferred stock. Payments on the company's equity units are not affected, CIT said. The company has also received the final $1 billion in a $3 billion credit agreement, with a "substantial" amount to be used to support its small business and middle market customers, CIT said in a statement.
If CIT should file for bankruptcy, smaller mom and pop businesses may have their lines of credit cut off, which could potentially lead them to seek other alternative financing including from credit unions.
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