Cit Commercial Loans: What You Need To Know

CIT, a division of First Citizens Bank, offers commercial real estate loans, in addition to working capital loans, equipment financing, and SBA 504/CDC loans. First Citizens Bank offers SBA 504 loans, backed by the U.S. Small Business Administration, which can be used to finance commercial real estate. The bank also offers SBA 7(a) loans, which can be used for a wide range of business expenses, including partner buyouts, startups, expansions, and franchise financing. In 2008, CIT sold its home lending division, and in 2009, its request for Federal Deposit Insurance Corporation loan guarantees was rejected.

CIT's merger with First Citizens Bank

CIT Group's merger with First Citizens Bank has created one of the top 20 US financial institutions, with over $100 billion in assets. The merger, completed in 2022, has been described as a "transformational milestone" by First Citizens chairman and CEO, Frank B. Holding Jr.

First Citizens BancShares, Inc., the financial holding company that operates First Citizens Bank, is now publicly traded on the Nasdaq under the symbol FCNCA. The combined company, headquartered in Raleigh, North Carolina, operates under the First Citizens name and offers a full suite of personal, business, commercial, and wealth products and services.

CIT, CIT Bank, and OneWest Bank initially operated as divisions of First Citizens Bank, with customers able to continue banking as normal through their current branches, websites, mobile apps, bankers, and advisors. Over time, a series of conversions to First Citizens' systems and operations took place. The merger has allowed First Citizens to expand its services, providing commercial financing, community association banking, middle-market banking, equipment and vendor financing, railcar financing, treasury and payments services, and capital markets and asset management.

The merger combines the complementary strengths of both organizations. First Citizens Bank's robust retail franchise and full suite of banking products complement CIT's strong market position and established strength in commercial banking. The combined entity is now America's largest family-controlled bank, allowing it to continue its legacy of stability and long-term thinking.

Commercial real estate loans

Some financial institutions, like PNC Bank, offer convenience by allowing customers to apply for loans over the phone or at any of their branches. They also provide various loan options, including loans, lines of credit, and credit cards, which are all subject to credit approval. Similarly, Chase for Business offers flexible financing options for small businesses, including lump-sum funding and revolving credit.

Preferred Rewards for Business members may also be eligible for an interest rate discount of 0.25%-0.50% on new Commercial Real Estate loans, based on their tier at the time of application. This can be a significant advantage for businesses looking to reduce their borrowing costs. Additionally, businesses can take advantage of a 25% discount on loan administration or origination fees, further reducing the overall cost of the loan.

When considering a commercial real estate loan, it is important to assess your financial position and understand the specific requirements and offerings of different financial institutions. It is also worth noting that your actual interest rate may differ based on your creditworthiness and overall business relationship with the lending institution.

SBA 504/CDC loans

The SBA 504/CDC loan program provides long-term, fixed-rate financing for major fixed assets that promote business growth and job creation. The maximum loan amount for a 504 loan is $5.5 million, and they are available to for-profit companies in the United States or its possessions with a tangible net worth of less than $20 million and an average net income of less than $6.5 million after federal income taxes for the two years preceding the application. Other eligibility criteria include falling within SBA size guidelines, having qualified management expertise, a feasible business plan, good character, and the ability to repay the loan.

The loans can be used for a range of assets, including the purchase or construction of long-term machinery and equipment with a useful remaining life of at least 10 years, as well as project-related AI-supported equipment or machinery for manufacturing products. They can also be used to consolidate debt under certain conditions.

The 504 loan program is administered by Certified Development Companies (CDCs), which are community-based nonprofit partners of the SBA that promote economic development within their communities. CDCs are certified and regulated by the SBA, and they can provide specific information on eligibility criteria and loan application requirements.

Borrowers with debenture-purchased 504 loans can create an account in the MySBA Loan Portal to monitor their loan status and make payments. Additionally, there is an active secondary market for CDC debentures backed by the SBA, providing CDCs with the option to sell these guaranteed debentures to investors.

Working capital loans

There are several types of working capital financing, including term loans, business lines of credit, and invoice financing. A business line of credit allows businesses to borrow money as needed and only pay interest on the amount borrowed. This can be useful for businesses that need flexibility, as they can borrow against their credit line, pay down the debt, and borrow again without having to reapply or open a new account. However, some business lines of credit have variable interest rates and maintenance fees, which could lead to higher costs.

Some working capital loans are unsecured, meaning the borrower is not required to put down any collateral. However, only companies or business owners with a high credit rating are eligible for unsecured loans. Businesses with little to no credit may need to securitize the loan with collateral. Working capital loans are often tied to a business owner's personal credit, so missed payments or defaults may hurt their credit score.

Qualifying for a working capital loan can vary depending on the lender. Some common requirements include having at least 20% ownership in the company, operating within the US, and having a minimum annual revenue. Lenders may also require daily or weekly payments from credit card sales or direct payments from the business's checking account. It's important to carefully review the terms and conditions of any loan before applying.

Equipment financing

CIT, which stands for Commercial Industrial Trust, offers a range of financial products and services to businesses, and equipment financing is one of their key offerings. This type of financing is a great option for businesses that need to acquire new equipment but don't want to pay the full cost upfront. With equipment financing, the lender purchases the equipment on behalf of the business and then leases it to them for a set period. This can be a more affordable option than buying equipment outright, as it allows businesses to spread out the cost over time.

The process of equipment financing with CIT is designed to be straightforward and efficient. Businesses can apply online and typically receive a decision within a few business days. CIT will work with the business to understand their unique needs and structure a financing agreement that suits their cash flow and budget. This can include customizing the term length, which can range from a few months to several years, and determining whether a lease or loan is the best option.

One of the key benefits of equipment financing with CIT is the potential for tax advantages. In some cases, the payments made on the equipment may be tax-deductible, and CIT's team of experts can provide guidance in this area. Additionally, as the equipment is not owned by the business, it doesn't appear as a liability on their balance sheet, which can improve the overall financial health of the company.

CIT's equipment financing options are available to a wide range of businesses, including startups and established companies. They offer competitive rates and flexible terms, making it a viable option for businesses of all sizes. By choosing equipment financing, businesses can acquire the tools and assets they need to grow and succeed without tying up their capital. This type of financing can be a powerful tool for businesses to manage their cash flow and invest in their future.

In summary, equipment financing offered by CIT provides businesses with a flexible and affordable way to acquire the equipment they need. By structuring the financing to suit the business's cash flow and providing potential tax advantages, CIT helps businesses manage their finances effectively. Whether it's upgrading outdated machinery or investing in new technology, equipment financing can be a powerful enabler for growth and success. Businesses can focus on their operations and strategic goals, knowing they have access to the necessary equipment without a large upfront cost.

Frequently asked questions