CIT Group, the US small-business lender, on Monday sweetened its tender offer for $1bn of debt due this month after failing to win bondholders over with its original price.

The lender, which has struggled to meet short-term liquidity requirements amid rising loan losses and a freeze in wholesale funding markets, raised the purchase price for the bonds from $825 to $875 for each $1,000 in principal amount of notes tendered.