• Commercial & Industrial Finance

    CIT Commercial & Industrial Finance provides customized financing and advisory services in all stages of the business cycle, including working capital, growth capital, acquisition, debt refinancing, recapitalization and restructuring. We serve a wide range of industries including manufacturing, retail, restaurants, consumer products, and chemicals.

    Manufacturing Products & Services:

    • Working capital
    • Acquisition financing
    • Growth capital
    • Management buyouts
    • Debt refinancing
    • Recapitalizations
    • Turnarounds
    • Restructurings
    • Debtor-in-possession financing
    • Confirmation plan financing   

    Asset-based loans:

    • Senior secured revolving and term debt based on asset valuations 
    • Revolving lines of credit based on valuation of inventory and receivables and term loans based on valuation of fixed assets (including machinery, equipment and real estate)
    • Loans against valuable trademarks, patents, licenses and royalties     

    Cash Flow Financing:

    • Predominantly in connection with acquisition financing
    • Senior secured debt, which is based on a multiple of EBITDA and understanding of cash flow drivers
    • Reliance on a company's operating performance, management strength and competitive position

    Select stretch asset-based loans and hybrid structures:  

    • Senior secured revolver and term financing with advances beyond traditional ABL advance rates  
    • Reliance on cash flow and traditional asset-based analytics

    First out/unitranche structures:

    • On an asset-based or cash flow basis 

    Machine Tools Heavy Equipment Key Areas of Focus:

    • Manufacturers
    • Restaurants
    • Wholesalers and distributors
    • Chemicals
    • Select financial services
    • Retailers
    • Consumer products
    • Metals
    • Automotive
    • Other heavy manufacturing
    • Paper
    • Plastics
  • Select Commercial Finance Transactions

    CIT combines its deep expertise in creating financing and treasury management solutions with outstanding execution and service, helping our clients achieve their full growth potential. See our latest accomplishments: Tombstone Collage

  • Related Content

    CIT Executives provide their outlook on e-commerce and retail industry trends. [Q&A]
    Here are the 7 key indicators lenders look for in a restaurant franchise financing. [Article]

    So you need financing for your restaurants? Just like packing for a trip, you need some standard items - things to keep in mind before you pick up that phone. Beyond the broad economic conditions, multiple factors weigh into the lender's credit decision. Here are seven to consider:

    Restaurant Franchise - thumbnail 1. Sector Trends

    Which of the main restaurant categories - full service, quick service, fast casual, and snack - are in growth mode and which are in decline? Is the Franchisor responding to, driving, or missing market changes and demands? There are always winners and losers. Although sector shifts don't happen overnight, most lenders take an extended view regarding portfolio performance, which extends years or even decades and must be cognizant of broad trends. Other considerations such as labor laws, supply-side input costs, demographics, household income trends, and interest rates will factor into a lender's overall assessment of the sector.

    2. The Brand

    How is the system performing based on key metrics such as Same Store Sales, average unit volumes, COGS & Labor expenses and operating margins, and expected unit-level EBITDA? Is the concept performing above or below industry averages? Is the P&L insulated or susceptible to material input or COGS changes? How does the franchisee's performance over the past three years stack up against these benchmarks? 

    3. Attrition

    There are two categories: orderly and disorderly. The former represents a controlled closure for strategic or financial reasons while the latter indicates an unintended closure caused by poor performance. Store closings in a system aren't always bad - they may be tied to a naturally expiring lease or relocation across the street to better suit traffic patterns. But unplanned closures are a definite red flag.

    4. Lease and Restaurant Franchise Agreements

    If the borrower's lease on the premises or restaurant franchise agreement expires without options prior to expiry of loan term, a lender will struggle to offer financing. For suppliers with short A/R lifecycles this is not a significant concern since their terms often run only 30 days in contrast to the five to 10 year term for a loan. Does the borrower own their dirt or rent third party? What is the rent factor and appropriate cap rate if the borrower is looking for real property financing as well? A lessee paying above-market rents has less capital leftover to make their debt payments and all fixed charges get factored into their debt servicing covenants.

    5. Ownership Profile and History  

    Is the proposed borrower a financial buyer with operating partners or an existing owner/operator? What is the purpose of the restaurant financing? Does the borrower have sufficient "skin in the game" and operating infrastructure to perform successfully? Is the partner growth oriented or content running a static business?  What are the borrower's short and long term objectives?

    6. Asset Quality 

    Are the restaurants in good locations? How long ago were they renovated and do they represent the standard for the system?  How will required renovations impact the valuation of the enterprise?

    7. P&L Adjustments 

    Every transaction has variables that impact the unit-level EBITDA. For example, a borrower with 10 existing stores may have sufficient corporate office infrastructure to absorb a five store acquisition without adding additional G&A expense thereby amortizing their cost base over a greater number of stores and enhancing the unit economics. Alternatively, a franchisee may be looking at a revised FMV lease structure at expiry of term that impacts his free cash flow negatively.

    Concurrent with analyzing these factors and criteria, lenders prefer long-term partners with growth potential. For CIT, in our decades-long experience supporting restaurant franchisees, we have found that a smaller number of lasting relationships works best for us as well as the clients. When we know a franchisee's business inside and out, it positions us as a trusted advisor to guide them in selecting the most appropriate finance products and structures to assist them in maximizing their performance. Any franchisee who requires restaurant financing should consider carefully not just the terms of a first transaction with a lender, but whether that lender is sincerely invested in their future.

    Get the Tip Sheet: 7 Must-Haves for Restaurant Franchisees Seeking Financing.

    Visit cit.com/franchise to learn more about the restaurant franchise financing solutions offered by CIT.

    To read the full article, go to the Knowledge Center on cit.com. If you enjoyed this blog post, please consider sharing it with your social media networks and invite them to register for our blog alerts.  

    The retail industry is going through a form of evolution, maybe even a revolution. E-commerce has changed the way retailers sell, so that the major brick-and-mortar companies are looking at their individual stores, potentially closing what they consider unprofitable stores, and investing in e-commerce to continue to grow their business. 

    In apparel, millennials and teen consumers have different buying habits than their parents, which is reflected in millennials' preference for 'buying' one specific item, even when at a mall or a store, rather than 'shopping' for multiple items. This difference can be attributed to the fact that millennials are often accustomed to buying a specific item online rather than browsing for items in multiple stores. Consumers whose shopping behavior was established before the rise of e-commerce could be more likely to browse through a store or a mall, leading to the discovery of new items and greater sales.

    Mall 350x250 Some of the other trends we're seeing in the market include:

    Consumers Favoring Experiences over Products: The apparel side of the business, as well as accessories, has slowed down. In the recent past, handbags, watches and leisurewear were booming. Those areas seem to have taken a significant step back, while consumers are spending more on restaurants, vacations and health spas. Consumers are favoring experiences over products, and retailers are reengineering their businesses as a result.

    Furniture Sector Remains Strong: The furniture segment continues to do well. Feedback at the furniture show in High Point, North Carolina, indicated that the show was extremely busy. A looming question in the furniture sector is whether the Asian suppliers will go direct to retail versus using furniture companies in the U.S. to distribute.

    Consumer Product Companies That Sell to Retail Still Pursuing M&A: Consumer product companies that sell to retail are looking to acquire the front ends of businesses, because that gives them an increase in revenue. If the acquirer already has the back office, warehousing and sourcing in place, an acquisition can add significantly to the bottom line, especially if the company is acquiring a brand that sells to customers it doesn't presently have. Acquisition at the right price can sometimes be the key to growth.

    Overall, retailers and consumer products companies that sell to retail continue to adapt in response to evolving consumer behavior. 

    You can read the full Executive Spotlight, "E-commerce Drives Retail Revolution," on the Knowledge Center on CIT.com.

    Marc Heller is President of CIT Commercial Services. His responsibilities include client service and retention, ensuring client credit quality and profitability, and business development for Commercial Services. He earned a BS in Economics from Queens College. 

    If you enjoyed this blog post, please consider sharing it with your social media networks and invite them to register for our blog alerts.