CIT Group Inc., a lender to small and mid-size businesses, has launched a restructuring plan to erase $5.7 billion of debt, but also warned that it might file for bankruptcy if it could not achieve its aim.

CIT Group obtained $2.3 billion from TARP previous fall, but that financial help could make company stand stable for a long time. The company is burdened with over 30 billion dollars of long-term debt.

Under the plan, CIT Group's bondholders with around 10 billion dollars of outstanding unsecured indebtedness signaled that they would take part in the exchange offer.

The exchange offer is scheduled to expire on October 29.

However, analysts at CreditSights, said, "The reduced debt may appease regulators at the Federal Reserve, but would not likely allow the company to fund itself in the corporate bond market or achieve investment grade credit ratings."

CIT Group, which operates in more than 50 countries, slipped into financial problems after a home mortgage meltdown pushed the country into its worst crises since Second World War.