By Stephen Bernard and Daniel Wagner, AP Business Writers

WASHINGTON (AP) — The board of CIT Group Inc., one of the largest U.S. lenders to small and midsize businesses, approved a deal with major bondholders to keep the company out of bankruptcy, said two people briefed on the talks.

CIT will receive a rescue loan from key bondholders hoping to keep it alive long enough to restructure its debt, these people said. They spoke on condition of anonymity because the company has not yet made an official announcement.

The deal will not necessarily prevent a bankruptcy filing for the ailing firm, but will give it desperately needed breathing room while it attempts to refinance existing debt. CIT has a $1 billion payment due in August.

Shares of CIT jumped 56 cents, or 80 percent, to $1.26 in afternoon trading Monday.

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