Report: Microsoft Financing Cuts Ties With CIT

CIT lends money to thousands of small businesses, sometimes as a third party to another lender. CIT was one of several institutions behind Microsoft Financing, which is designed to help partners close deals involving software, hardware, and services and until recently was one of the most popular aspects of Microsoft's channel program.

Stacie Sloane, director of marketing for Microsoft's worldwide licensing and pricing group, told The Wall Street Journal that CIT will continue servicing existing loans and that Microsoft has activated a contingency plan to enable partners and customers to get new financing other institutions.

In July 2006, CIT and Microsoft entered a five-year agreement that made CIT the exclusive financing partner for Microsoft Financing in France and Switzerland, and November 2007 expanded the relationship to the U.S. and Canada.

Microsoft partners have longed raved about the convenience and generous terms of Microsoft Financing, but in May, Microsoft started restricting financing to deals involving at least 35 percent Microsoft software and/or services.

According to research firm CreditSights, CIT has around $40 billion of long-term debt, about $1.1 billion of which comes due in August, and $2.5 billion by year-end. CIT has lost close to $3.3 billion since the end of 2007.