New York Post ran an article alleging CIT ( CIT) began restricting credit to vendors selling to J.C. Penney. CIT offers J.C. Penney vendors credit through a process called "factoring." Factoring works this way: A vendor sells to J.C. Penney and instead of billing J.C. Penney and waiting 30 or more days to get paid, it receives maybe 98% of the invoiced amount from CIT right away. CIT invoices J.C. Penney for the merchandise, waits (and hopes) to get paid and profits from the difference. If CIT believes J.C. Penney may not pay its bills, CIT will inform vendors they will not receive immediate payment and vendors will stop shipping merchandise. J.C. Penney can't sell from an empty apple cart, and the situation can spiral into a fast self-feeding panic among vendors. J.C. Penney was quick to deny the rumor and stated "that a news report which appeared yesterday is untrue and that it has been told so directly by CIT, the subject of that report." It's standard procedure for companies to "deny, deny, deny" problems; otherwise, the wheels can quickly fall off the cart. In J.C. Penney's case, it's more than reasonable to believe the company's rebuttal because unless it is burning through cash at a much greater rate than anyone would guess possible, it has more than enough credit lines available to pay the bills.