This week we chatted with Jim Hudak, President, CIT Commercial Finance. Jim has been with CIT and predecessor companies (AT&T Capital, Newcourt, Tyco) since 1991. He has also run the Corporate Finance Group at CIT, which comprises leading industry verticals in Aerospace & Defense, Commercial & Industrial, Communications, Media & Entertainment, Energy and Healthcare. The group is dedicated to servicing the specialized financing and advisory needs of small- and middle-market companies in the U.S. and Canada.
The Lead Left: Jim, thanks for taking the time to catch up today. What’s CIT’s vision now that Ellen Alemany has taken over from John Thain as CEO?
Jim Hudak: Since Ellen took over [in April 2016] the focus has been to simplify, strengthen and now grow the company. The middle market is integral to what we do. We’ve gotten out of a number of businesses, such as aircraft leasing that were not core and the vision is to stay in places where we can create value.
We are a bank, so for us the middle market is key. Historically we’ve been a finance company and I can see both sides now. There are advantages to both bank and finco structures. We have to play within the bounds of regulations but we have a stable and efficient funding as a bank.
TLL: Isn’t that the importance of your Allstate joint venture? Talk about that a bit.
JH: Sure. As background, our commercial finance business is roughly 60% dedicated to cash flow type financings, with 40% asset-based. CIT has a rich history as a well-known ABL lender. The bank’s low-cost deposit base gives us consistent funding. But we don’t rely solely on the collateral, versus a finco model that’s very comfortable in a liquidation scenario. We have certain minimum “burn rate” requirements.