The mighty lender to 950,000 franchises and small businesses is looking increasingly like it may fail, according to experts. One sign is that since becoming a bank in December to qualify for  federal bail-out funds, CIT has bond prices that have plunged to basement-low levels, comparable to securities rated on the brink of default.

“They won’t be able to survive” without cheap funding, said Jason Brady, a managing director at Thornburg Investment Management, which manages $40 billion, including CIT bonds, in Santa Fe, New Mexico. “The fact that their access to TLGP has been delayed so long is a bad sign.”

A failure of CIT, which has almost $76 billion in assets, would be the biggest bank collapse since regulators seized Washington Mutual Inc. in September.

The government doesn’t regard CIT as too big to fail. Bloomberg says that CIT's best chance of survival is to find a buyer.