GE cuts unsecured finance program to industry
By Clint Engel -- Furniture Today, May 5, 2008
Chicago — GE Capital Solutions confirmed last week that it is cutting back its inventory financing program to the furniture industry.
"Due to current economic and market conditions, a strategic decision has been made to reduce our unsecured inventory financing exposure in the furniture industry," the company said in an e-mail response to a Furniture/Today inquiry.
Effective immediately, GE is no longer offering new credit lines under an unsecured inventory finance program, Chad Lyon, home furnishings business leader for GE Commercial Distribution Finance, said in the e-mail.
"We are currently evaluating all existing customers on the unsecured program and they will be given reasonable time frames to make other arrangements for financing," he said.
When asked about the number of furniture companies affected or the amount of inventory financing exposure it has with the industry, the company declined to comment further.
Sources familiar with the move say GE is giving existing furniture customers about 60 days to make other arrangements.
In the e-mail, Lyon said GE "continues to offer a wide variety of financing programs in the furniture industry and this will not affect business that our inventory financing customers may have with GEMoney, other GE or CDF divisions, and the furniture buying groups."
John De Falco, vice president of U.S. sales at Primo International, said his company is a GE client and was informed recently that GE would not be offering unsecured credit, but he doesn't expect it to be much of an issue for the importer.
"We use multiple credit suppliers currently so we don't see it as a big roadblock," he said.
