Though CIT Group, a New York-based commercial lender, provides loans to only small and medium-sized businesses, it is still a major player in the lending game, a major player with some major financial troubles. And apparently, the government doesn’t think it’s big enough to qualify for a government-initiated rescue.

Because of this, it is likely the troubled firm will file for bankruptcy tomorrow, taking away a key source of credit for thousands of U.

S. firms. On top of that, it appears J.P. Morgan (which recently posted surprising earnings) has a stake in CIT, just as Goldman Sachs had a stake in AIG. Let’s just hope J.P. Morgan’s interest isn’t quite as big.

The Reuters blog puts it most eloquently:

The pairing of almost certain bankruptcy of the little guy lender with the blow-out earnings of Wall Street giants, JP Morgan and Goldman Sachs, makes a strong argument for smaller financial institutions to beef up their operations so they, too, can be too big to fail.

Trading in CIT was halted yesterday and it remains to be seen exactly how its almost-certain failure will affect J.P. Morgan and the rest of the market.

CIT Group — big, but not big enough.