NEW YORK (Reuters) - CIT Group Inc has clinched $3 billion of emergency financing from bondholders, keeping the struggling lender out of bankruptcy, a person close to the matter said.

The rescue from several big bondholders including Pacific Investment Management Co has been approved by CIT's board, the source said.

A rescue could allow more time for the 101-year-old lender to small and mid-sized businesses to restructure its debt, and preserve the ability of thousands of businesses to obtain cash needed for day-to-day operations.

Yet several analysts and bankers said it might only delay a bankruptcy filing, in light of skittishness among CIT customers and the New York-based company's inability to readily tap capital markets.

"The deal is a negative for bondholders as it does not fix the underlying problem and layers in more secured debt," wrote CreditSights Inc analysts Adam Steer and David Hendler. 0

CIT spokesman Curt Ritter declined to comment after initial reports of the rescue. He was not available yesterday.

In afternoon trading, CIT shares were up 58 cents, or 82.9 percent, at $1.28 on the New York Stock Exchange.

According to published reports, CIT would pay interest on the financing of 10 percentage points more than the three-month London Interbank Offered Rate. This equates to an annual rate of about 10.5 percent.

The bondholder group includes Pimco, a unit of German insurer Allianz SE, and other large investors, and is expected to provide financing with a two-and-a-half-year term, two people familiar with the matter said.

This financing would be backed by unsecuritised CIT assets, which probably exceed $10 billion, one of the sources said. The sources requested anonymity because the talks are private.

A rescue would help CIT address a looming $1 billion bond payment due next month. Yet it would not necessarily restore longer-term confidence in the company, following a liquidity squeeze exacerbated by customers who drew down credit lines.

CIT had sought emergency federal funding before talks broke down last week. The Obama administration appeared to draw a line as to how readily it would bail out troubled companies, following several big corporate bailouts over the last year.

Retail industry groups had last week urged US Treasury Secretary Timothy Geithner to act to ensure CIT's survival.

The bondholder rescue could, however, preserve the government's $2.33 billion investment in CIT from the Troubled Asset Relief Programme. CIT became eligible for such financing when it became a bank holding company in December.

A rescue "comes as a great relief" for retailers preparing for the back-to-school and holiday shopping seasons, said Tracy Mullin, chief executive of the National Retail Federation.

"CIT could not be allowed to fail at a time when retailers are already struggling to survive," she said in a statement.

Problems at CIT mushroomed two years ago in the wake of chief executive Jeffrey Peek's decision earlier in the decade to expand into subprime mortgages and student loans.

Last week's government decision not to provide aid surprised Peek, leading him to seek help from private investors, one of the people familiar with the matter said.

A bankruptcy would make CIT, with $75.7 billion of reported assets, the largest US financial company to go bankrupt since Lehman Brothers Holdings Inc last September.

CIT has about $40 billion of long-term debt, CreditSights said. It has lost close to $3.3 billion since the end of 2007.