GE Capital Stops Lending to Gun Shops

GE Capital has stopped financing gun purchases.

GE Capital is the second large company to get out of the firearms business, The Wall Street Journal reports. Cerberus Capital Management announced days after the Sandy Hook Elementary School shootings, that killed 26, that it was trying to sell Freedom Group Inc., maker of Remington, Bushmaster, Marlin and H&R guns.

GE Capital spokesman Russell Wilkerson told the Journal the company’s decision was based on "industry changes, new legislation and tragic events."

Sandy Hook is not far from GE’s Fairfield, Conn. headquarters, and several employees have children who attend, the Journal notes. The father of the shooter, Adam Lanza, is a GE executive.

Despite the size of GE Capital, its departure from the gun financing business will have little impact on the market, the Journal notes. Few gun buyers finance their purchases, anyway. Shop owners said the financing option did get some customers to buy more accessories.

And GE’s action affects fewer than 75 stores. It continues to do business with retailers such as Wal-Mart which sell guns as part of their business.

GE entered the gun financing business in 2006 and stopped taking new customers two years later. The businesses affected by the new ban were those grandfathered in by GE in 2008.

Some smaller companies are already filling the gap left by GE Capital. Gun Financing focuses on younger men with credit issues who want high-end rifles for sport shooting. Law Enforcement Finance caters to police officers.