Denied a government bailout, foundering middle-market commercial lender CIT Group (CIT) is scrambling to line up as much as $3 billion in capital from private investors in a bid to stave off bankruptcy.

It's a race against time. The Wall Street Journal and CNBC, among others, are reporting that CIT has given the investors 24 hours to decide whether to decide if they will plow the needed cash into the company. In the meantime, its condition is worsening as customers draw down credit lines they fear might not be there tomorrow.

But will $3 billion be enough? In a note to clients today, bond analysts at research firm CreditSights estimated CIT may need to raise twice that amount to remain afloat. It faces a billion-dollar debt payment next month and dwindling cash reserves.

For investors in the company's bonds, "the prudent course is to brace for bankruptcy," the CreditSights analysts wrote in a note to clients today.

Last night, CIT announced that "there is no appreciable likelihood of additional government support being provided over the near term" and that talks with the government had ended. The company had sought access to a program run by the Federal Deposit Insurance Corp. that guarantees bank debt.

In a statement, the Treasury Department said, "Even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies."

Evidently it was a threshold that CIT, which counts numerous small- and mid-size businesses among its customers, could not cross. The company already received a $2.33 billion investment under the government's Troubled Asset Relief Program, or TARP.

Though CIT's precarious position is worrying for businesses that depend on it for financing, and despite the fact that a bankruptcy filing would make it the largest bank to fail since the collapse last fall of Lehman Brothers and Washington Mutual, GimmeCredit bond analyst Kathleen Shanley said the market isn't signaling that company isn't too big or interconnected to fail.

"While there has been an outcry from CIT customers concerned about access to credit, we note that the equity and corporate bond markets as a whole have been relatively unruffled by the CIT drama," she wrote in a note to clients today.

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