The US lender, CIT Group, has filed for bankruptcy protection, after a debt-exchange offer to bondholders failed.
However, the majority of bondholders have agreed a reorganisation plan that will reduce CIT's debt by $10bn (£6bn) while allowing it to go on operating.
The group's operating subsidiaries, including CIT Bank, were not included in the bankruptcy filing in New York.
CIT Group suffered as the credit crisis left it unable to fund itself, and the recession exposed it to many bad loans.
Under the reorganisation plan which has been approved by bondholders, creditors will end up owning the company.
Many observers predict that if CIT is able to continue in business after emerging from bankruptcy protection, it will not be able to make anything like the same number of loans to small businesses.
That could mean that thousands of companies which are looking to raise money for investment will struggle to find the cash, they warn.
It just keeps getting worse and worse. I know that's supposed to happen, but it really doesn't make things any easier.
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