When Irwin Financial Corp. of Columbus, Ind., found itself in need of capital, it turned to a company it helped start nearly 90 years ago.

This week Cummins Inc., a diesel engine maker that got its start with funding from Irwin in 1919, announced it had a standby commitment to provide $25 million of the $50 million Irwin is raising to continue its restructuring.

Investments from commercial firms are uncommon, but experts say that in the current fund-raising environment, now could be an opportune time for bankers to turn to corporations — particularly those they know well — for a capital boost.

Ross Demmerle, an analyst with J.J.B. Hilliard, W.L. Lyons Inc., said the commitment from Cummins stokes confidence about Irwin's viability and could make it easier for the company, which is facing increasing regulatory scrutiny after a failed bid to unload its home equity business, to raise the remaining capital.

Irwin has an additional $6 million of commitments from Will Miller, its chairman and chief executive, along with his family and a former chairman and CEO of Cummins and Lucent Technologies.

"I think the commitment here is to show current shareholders that there is support behind this rights offering," Mr. Demmerle said. "I would assume" Cummins would "want to help Irwin stay an independent bank."

Matt Souza, Irwin's chief administrative officer, said it approached Cummins because the companies know each other well.

"There is a lengthy relationship that is rooted in the fact that the companies were founded in the same southern Indiana community," he said. "We both call Columbus our home."

Tim Solso, Cummins' chairman and CEO, said Tuesday in a press release that it is in the interest of the community — and Cummins — for Irwin to get healthy.

"IFC is the largest financial institution in our home community and the second-largest in our home state. Given all of the chaos in the financial markets, Cummins wants to help ensure that IFC's restructuring plan works," Mr. Solso said. "This standby commitment expresses Cummins' confidence in IFC and IFC's management."

Analysts who cover Cummins say the $25 million investment is a relative drop in the bucket for the company, which earned $293 million in the second quarter.

If Irwin succeeds in raising the full $50 million, Cummins would have an 18% ownership stake. Oliver Ireland, a partner in Morrison & Foerster LLP, said that with that stake, Cummins could seek more oversight of Irwin.

"When investors put money in, they want a say," he said. "The more money they put in, the more say they want."

Cummins said it intends to be a passive investor, though the $25 million investment does come with the option for a board seat. Mark Land, a Cummins spokesman, said it is grateful it is in a position to help out Irwin, but "it's not just a nice thing to do." There is "a return to be had here."

Irwin's restructuring plan centers on a return to small-business lending — particularly in the franchise business — and traditional community banking after six consecutive quarters of losses.

The streamlining hit a snag Oct. 1, when Irwin's plan to sell nearly $1 billion of home equity loans was called off. Mr. Souza said his company is still working on a deal to unload the loans.

Also Tuesday, Irwin said it entered written agreements Oct. 10 with the Indiana Department of Financial Institutions, the Federal Reserve Bank of Chicago, and the Office of Thrift Supervision that call for it to preserve its capital, stop making construction or land loans without approval, suspend its dividend, and protect its liquidity. Mr. Souza said his company has been doing all those things for months.

Also, the OTS ordered the company to appoint a president, a chief executive officer, a chief credit officer, a chief financial officer, and two independent directors to oversee its federal savings bank, Irwin Union Bank.

V. Gerard Comizio, a partner at Paul, Hastings, Janofsky & Walker LLP, said he would not be surprised if more cash-strapped banks turned to nonbanks for capital infusions.

Last month the Federal Reserve Board released a policy statement making it easier for private-equity firms to make sizeable investments in banking companies without having to form a holding company or submit to bank regulation. Equity investments by commercial firms such as Cummins would fall under that change, though Mr. Comizio said more liberal rules are needed to help bankers get capital from various sources.

"Everybody's money should be good enough in this type of capital-strapped banking environment," Mr. Comizio said. "The alternative is far worse: a taxpayer bailout. I think regulators need to continue to explore the avenues of allowing nonfinancial firms to invest."

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