J.C. Penney CEO Mike Ullman told investors the retailer does not see conditions for the rest of the year where it would need to raise liquidity, a source told CNBC.
Ullman added that the company will see how it does in the fourth quarter.
In a statement, the struggling retailer said, "J.C. Penney's vendors are very supportive. We are paying them on time and have not heard any issues with regard to factors."
In the retail industry, factors, such as CIT, serves as a financial intermediary that supply vendors with cash until a retailer pays for the merchandiser. They also guarantee vendors that they'll get paid if a retailer goes bankrupt.
After reversing sharp early losses, J.C. Penney stock rose. (Click here to track the company's stock.)
An earlier report said the company is looking to raise as much as $750 million to $1 billion in new equity to build up its cash reserves as the holiday season approaches, according to three people with knowledge of the matter.
Penney, whose shares have fallen 49 percent so far this year, has a market value of $2.6 billion. The U.S. department store chain is leaning toward issuing new shares, the sources said, although other methods of raising capital are also on the table.
Penney said in a statement Thursday that it is pleased with its progress thus far in the company's turnaround efforts and the traction its initiatives are starting to achieve. It also said it is "starting to see greater predictability in its performance across many areas."
"The company continues to be encouraged by improvements in purchase conversion both in store and on jcp.com, primarily due to being back in stock in key items and sizes the customer expects to find at JCPenney," the company said. "Overall sales on jcp.com continue to trend double digits ahead of last year."
Penney said it still anticipates it will experience positive comparable store sales trends coming out of the third quarter and throughout the fourth quarter of 2013.
(Read more: JC Penney and Best Buy: A tale of two retailers)
Penney's sales dropped 25 percent last year after it eliminated coupons and jettisoned merchandise that was popular with long-time customers but didn't fit into former Chief Executive Ron Johnson's plan to offer trendier items.
Even after Penney reinstated its old pricing strategy in the spring, sales again fell.
The company's shares tumbled 15 percent on Wednesday after Goldman Sachs said in a research note it expects the retailer's sales to improve more slowly than expected through the end of the year. In intraday trading on Wednesday, the shares dropped to a 13-year low.
The note also raised questions about Penney's liquidity.
(Read more: JC Penney's holiday hiring plans)
"In order to safeguard against a potentially poor 4Q (fourth-quarter) holiday season, it is likely that management will look to build a bigger liquidity buffer," Goldman analyst Kristen McDuffy wrote in her note on Wednesday.
Earlier this year, Goldman arranged a $2.25 billion loan for Penney to shore up its finances.
Last month, Penney said it expected to have $1.5 billion in cash at the end of its fiscal year on Feb. 1, enough to have ample merchandise on shelves.
(Read more: JC Penney stock is getting killed after tough Goldman report)
The cost for insurance against a J.C. Penney default has shot back to near record-high levels during the last week. With about $2.6 billion in bonds outstanding, the company has a "CCC " credit rating from Standard & Poor's, reflecting a substantial risk in owning its debt.
The company's benchmark five-year credit default swap contract price surged by more than 13 percent on Wednesday, according to Markit data.
The cost to insure $10 million of Penney bonds against a default for five years now requires an upfront payment of about $2.2 million plus quarterly payments of about $300,000 for the duration of the contract.
The contract's pricing reflects a default probability of nearly 65 percent.
—By Reuters