CIT Group says it will waive fees on SBA loans, to commit $500M to small-business lending

CIT Group to waive fees on SBA loans

NEW YORK — CIT Group Inc., one of the nation’s largest lenders to small and mid-sized businesses, said Monday it is waiving fees for the next three months on all approved Small Business Administration Loan applications.

CIT Group is waiving the $1,000 packaging fee at the same time it is planning to commit $500 million to support its small-business lending operations in 2010.

The moves come as CIT Group tries to regain business and reaffirm itself as a top commercial lender after exiting bankruptcy protection last week. CIT swiftly moved through bankruptcy court in just six weeks because its key bondholders had already approved a plan to reorganize the company.

The $500 million will be originated through CIT’s small business lending group to fund government guaranteed loans as part of two small-business lending programs, the SBA 7(a) and 504 programs.

The $1,000 fee will be waived on all applications for 7(a) loans beginning Monday and running through March 10.

CIT, based in New York, was forced into bankruptcy on Nov. 1 after failing to raise cash to pay off outstanding debt. It was also hurt by mounting loan losses as more customers fell behind on repaying loans amid the recession.

By originating government-guaranteed loans like the SBA loans, CIT is protected against losses should the customers fail to repay their debt.