UPDATE 2-CIT bankruptcy plan may win OK at Dec. 8 hearing

* CIT hopes to emerge from Chapter 11 by year's end

* CIT lawyer sees "need for speed"

* 1 million businesses depend on company for lending

* CIT shares little changed on Pink Sheets (Adds details from judge ruling)

By Jonathan Stempel

NEW YORK, Nov 3 (Reuters) - A U.S. bankruptcy judge set a Dec. 8 hearing to consider approval of CIT Group Inc's (CITGQ.PK) reorganization plan, aiding the large commercial lender's effort to emerge from bankruptcy by year's end.

"We are on a very fast track," Judge Allan Gropper said at a Tuesday hearing in Manhattan bankruptcy court.

A quick reorganization is crucial if New York-based CIT expects to retain most of its customers, and remain what its lawyer Gregg Galardi called "a source of strength" for its banking unit, which did not file for bankruptcy protection.

It is also crucial for the several hundred thousand small- and mid-sized businesses that depend on CIT for financing such as the operators of Dunkin' Donuts stores. Small businesses employ about half of the U.S. labor force.

"This is a financial services company that has to make loans, and is perceived by the market to need to make loans," said Galardi, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom LLP. There is a "need for speed," he added.

Gropper also approved a series of CIT motions, including its requests to immediately borrow $125 million from Bank of America Corp (BAC.N) and to pay workers and so-called "critical" vendors.

CIT filed for Chapter 11 protection on Sunday, one of the five-largest bankruptcies in U.S. history, to reduce $10 billion of debt following a failed debt exchange offer.

The filing came after CIT gathered support from most of its bondholders to restructure, and a $1 billion financing commitment from investor Carl Icahn.

CIT also has a dominant position in factoring, which often involves short-term financing for customers that provide merchandise to retailers. Wells Fargo & Co (WFC.N) is also another provider of factoring.

According to its bankruptcy petition, CIT had $71 billion of assets and $64.9 billion of liabilities on June 30.

GOVERNMENT STAKE ENDANGERED