Over the summer I wrote about CIT’s potential bankruptcy. While a bailout helped it survive the last quarter, CIT officially filed for Chapter 11 protection today.

CIT is an essential part of the small business world. As we look to the holiday shopping season, if merchants or their supply chain can’t get credit, it’s just going to get ugly out there. CIT’s spin says that the pre-packaged bankruptcy will make everything ok, but I’m not buying the story. And unfortunately, if small businesses look for new lenders, that’s probably not going to be so easy, as this CNBC report hints. Credit market is still way too tight.

Some pundits are starting to project healthy numbers for retailers this holiday shopping season. Yes, I think some retailers will do well, but if you’re only looking at year over year numbers, you’re only getting part of the story. We might not have fallen off a second cliff – and that is something to cheer – but we also aren’t going to be celebrating like it’s 2007.