Chris Esposito
Managing Director of Asset-Based Lending

CIT is an established name in the asset-based lending industry, but that hasn’t stopped it from continuing to evolve and innovate. In 2020 alone, the bank expanded its ABL division, hired a new ABL team leader and continued to close deals with its CIT Northbridge Credit joint venture, setting itself up for continued success in the marketplace. 

Even before 2020 began, CIT knew this year was going to be an important one for its asset-based lending business.

Recognizing an economic cycle that had seen years of growth, CIT prepared itself to support the anticipated needs of businesses opting for asset-based facilities in a potentially weaker environment. Such a downturn was accelerated by the realities of COVID-19, but both before and after the pandemic, CIT has taken major steps to strengthen its ABL offerings.

One of those steps occurred in January when the bank closed on its acquisition of Mutual of Omaha Bank, which gave CIT new footholds in the Omaha, NE; Dallas; Phoenix; and San Diego markets. Just having new markets would mean nothing without an established product line, but CIT was ready with both regional expertise and a broad range of offerings across its commercial finance division, including traditional ABL.

“At CIT, we’re proud of our decades-long heritage as a premier asset-based lender,” David Harnisch, president of CIT’s commercial finance and real estate divisions, says. “We are known and respected for our deep industry knowledge, strong underwriting and structuring expertise, and willingness to work closely with clients to meet both simple and complex financing needs.”

With the ABL unit alone, CIT delivers first-in-last-out facilities, hard assets, intangibles, stretch term loans and more to new customers and current customers alike. With a larger regional footprint to operate in, CIT also expanded its asset-based lending business by leveraging strong and experienced internal talent.

“Instead of external hiring, my suggestion was to leverage the talent we have on the ground,” Chris Esposito, managing director of asset-based lending for CIT, says.

Esposito’s approach required helping relationship managers and underwriters in CIT’s expanded territories learn to better identify opportunities for which the ABL team could offer the best solution. From there, they could deploy these skills with their established customer relationships.

CIT also has been engaging the sales forces in its commercial services and supply chain finance organizations to recommend ABL products, growing the channels through which CIT can support clients. This aligns with CIT’s approach of delivering the support and services of the entire bank to its commercial clients, including treasury management, foreign-exchange and capital markets.

The recent ABL team expansion provides even more capacity, and as Esposito explains, there is plenty of room to grow.

“I’d like to see ABL grow to where CIT is one of the largest in the market,” Esposito says. “We’ve always had our reputation as a leading ABL lender. I’d just like to see us grow back to the scale we were.”

Question Answered

Esposito is well positioned to be a key driver in making that happen, having been named the managing director of CIT’s ABL team in early July. As one of the longest tenured members of CIT’s ABL business, he was a logical choice for the role.

Since joining CIT in 2002 to help with the newly formed retail ABL unit, Esposito has experienced the ups and downs of the industry, building on a nearly 40-year career in banking and commercial lending. During his tenure, Esposito learned that asking questions is a critical part of the process. Perhaps not coincidentally, Esposito got the job he has today by asking a pretty simple one.

When Burt Feinberg retired in 2019, CIT’s ABL unit was left without a leader. Esposito took over in a de facto capacity. After months of performing the role, Esposito spoke with Harnisch and asked to be considered for the leadership position. Harnisch, having known Esposito for more than a decade, decided he was indeed the right choice — both internally and externally — to lead CIT’s ABL business into its next chapter.

“At this point in my career, with 30-something years in asset-based lending and almost 40 years in banking, I was more than ready to step up and take a larger role,” Esposito says. “I saw we would be growing ABL in the future, so I wanted to be part of that.”

As much as growing the business has been a major initiative in his first few months leading the ABL team, Esposito’s largest challenge has been dealing with the COVID-19 pandemic, both internally with staff and externally with clients. On the client side, Esposito has seen an uptick in conversions from cash flow-based facilities to asset-based loans and a growing need for liquidity to keep businesses afloat. That has led to an increase in business activity for Esposito’s team, especially as the economy has begun to show signs of recovery.

Given continued uncertainty with COVID-19, Esposito expects flexibility will be essential in ABL financings given the difficulties of arranging face-to-face meetings with clients and the challenges faced by third-party providers like field examiners. These are hurdles that he and his team must continue to address in this environment to support an increased level of client activity.

“It will take some time before the full economic impact of COVID-19 is understood. However, as long as we’re in an economic downturn, asset-based lending will continue to expand,” Esposito says. “And even when there’s not a downturn, given CIT’s expanded regional footprint, there are always more opportunities to explore and more clients to serve.”

Broadening the Scope

Neal Legan
Executive Officer
CIT Northbridge Credit

Esposito’s traditional ABL unit isn’t the only way CIT approaches the market for asset-based lending. Today, CIT has two origination channels for asset-based transactions. In an effort to serve a broader spectrum of borrowers, CIT entered a joint venture in 2017 to form CIT Northbridge Credit. While this venture is a separate business, it builds upon CIT’s long-standing roots in the ABL industry.

“I think that’s actually a very good extra tool to have,” Esposito says. “While CIT Northbridge and CIT asset-based lending each have independent sales organizations, opportunities are placed with the unit that can provide the best client solution.”

CIT Northbridge Credit is led by Neal Legan, who came to CIT 22 years ago and has a long-running track record in the credit space. The venture provides revolving lines of credits and term loans from $15 million to $150 million. With Legan and his team leveraging their considerable credit experience across a diverse offering of lending products, CIT Northbridge Credit extends CIT’s overall reach while giving borrowers access to unique financing options combined with access to the full suite of CIT’s services.

“Using the same credit expertise that we have all developed, we can apply this skill across our ABL platform to provide sound lending facilities to a broader spectrum of customer profiles,” Legan says. “At the same time, CIT Northbridge can also connect clients with CIT banking products to complement our lending services, which differentiates us from other counterparts in the marketplace.

“The ABL product is an excellent lending solution through economic cycles and for supporting high growth, turnaround or maturing businesses. Having a platform to serve good companies in a different way is really complementary to what the bank does. We think we built a great platform with supportive partners and found a good marketplace to thrive in.”

Whether it’s CIT Northbridge, or the expanded ABL unit that Esposito is leading, CIT has put itself in an excellent position to expand across the asset-based lending industry — both in 2020 and the years to come. That was the plan the whole time, after all.*

Editor’s Note: This issue was finalized prior to the Oct. 16 announcement that CIT would merge with First Citizens BancShares. The combined company will operate under the First Citizens name and the merger is expected to close in the first half of 2021.