CIT, a US lender with a $76bn of assets, hired law firm Skadden to advise it on its financing options, according to the Wall Street Journal. The company, which may not be able to refinance a $1bn liability coming due in August, could seek bankruptcy protection, the newspaper reported.

In December, CIT became a bank and received $2.33bn in Tarp funds from the US government. According to Bloomberg, the lender to small businesses has not been able to access the corporate bond market for more than a year.

CIT said last week that its application for access to the Federal Deposit Insurance Corporation’s Temporary Liquidity Guarantee Program remains outstanding. “CIT continues to be in active dialogue with the government. There can be no assurance that CIT's application will be approved by the FDIC, nor as to the timing or terms of any such determination,” the company said in a statement.

• CIT statement