General Electric Co said on Wednesday its finance arm has been cleared to exit the government's Temporary Liquidity Guarantee Program, in a show of strength as rival business lender CIT Group Inc faces possible bankruptcy.

GE Capital, which has businesses ranging from investing in commercial real estate to financing sales of heavy equipment made by its conglomerate parent, said it is healthy enough to prefund its 2010 long-term debt issuance plan before the end of 2009.

It also said it has reduced its commercial paper balance from more than $100 billion in 2008 to $50 billion at the end of the second quarter of 2009 -- six months earlier than it had expected -- and increased its cash balance to more than $50 billion.

The move comes with TLGP set to expire in the fall, and a big investor meeting to review the financial condition of GE Capital scheduled for next Tuesday.

Today's plan to exit from TLGP affirms the strength of GE Capital's funding and liquidity position, including reduced reliance on government funding programs and our ability to access non-guaranteed debt markets, GE Treasurer Kathryn Cassidy said in a statement.

GE said that as a result of the U.S. Federal Deposit Insurance Corp decision to clear GE Capital's exit from the program, it will no longer issue government-guaranteed short-term debt and will be able to issue non-guaranteed long-term debt with maturities of up to three years.

(Reporting by Christopher Kaufman, editing by Gerald E. McCormick)