Shares of Sears Holdings (SHLD), billionaire Edward Lampert's struggling retail empire, slumped Thursday after Bloomberg News reported that some of the chain's suppliers may have a harder time getting paid.

One company that makes loans to small businesses, CIT Group (CIT), will no longer provide financial assistance to Sears' suppliers waiting to be paid.

Sears shares fell 3.5% to $31.75 in midday trading, and CIT Group shares were unchanged at $37.14.

The news couldn't have come at a worse time. The company recently reported dismal holiday sales and plans to shutter as many as 120 underperforming locations. Sears is downplaying the significance of CIT's decision not to provide suppliers with payment guarantees, arguing that "goods factored by CIT represent less than 5% of the company's inventory," according to Bloomberg. However, CIT is a giant in the industry, and other companies may follow its lead.

The following video discusses whether CIT Group's move may undermine the confidence of some of Sears' suppliers.

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Among Sears' biggest suppliers are appliance makers Whirlpool (WHR) and Electrolux (ELUXB), the news service says. CIT's decision may also affect apparel providers such as the Kardashians, whose Kardashian Kollection is available exclusively at Sears. Other big Sears brands include Craftsman, DieHard and Land's End.

Sears, whose shares have plunged more than 58% in the past year, has huge problems. Sales have fallen ever since Lampert merged Sears Roebuck and Kmart in 2005. The company's brand identity is muddled among customers and investors.

Though Thursday's news is hardly a death knell for Sears, it highlights the challenges that Lampert and CEO Lou D'Ambrosio face in turning around this once-venerable brand.

Jonathan Berr owns no shares of the listed companies.