Toys R Us is at risk of breaching a covenant on one of its loans, intensifying concerns about its ability to emerge from bankruptcy protection, sources familiar with the situation tell CNBC.

The storied toy retailer secured a $3.1 billion loan from a group of lenders led by J.P. Morgan Chase prior to filing for bankruptcy protection. That loan, a so-called debtor-in-possession, or "DIP," loan is given to a company to provide the money it needs to invest in the business while it is in bankruptcy.

But after a dismal holiday season, Toys R Us is now at risk of having too little cash to satisfy the terms of the loan.

The retailer is currently in compliance with its loan terms, and has a number of options afforded to it before it does breach the covenant, the sources said. These options include getting financing elsewhere so its cash balance does not breach the loan terms, or renegotiating the debt terms with its lenders.

If Toys R Us does breach the covenant, its DIP lenders have the option to force it to immediately pay them back, which could in turn force the retailer into liquidation.

The sources stressed that no decisions have been made and the DIP lenders remain supportive of Toys R Us.

Before the lenders can make any further decision, though, they are awaiting a business plan from Toys R Us, the sources said. That plan must prove to the lenders that the retailer is more likely to pay them back by doing business than it is by liquidating and selling its assets. The retailer's iconic brand, and the value of that brand, may help the retailer fortify its negotiations with lenders.

One option being weighed is closing roughly 200 more stores, but no decision has yet been made, a source said. The Wall Street Journal reported Wednesday that the retailer plans to close another 200 stores.

After the rough holiday season, the Wayne, New Jersey-based retailer announced in January plans to shutter roughly 180 stores across the country, or about one-fifth of its U.S. store fleet, in an effort to focus on its most profitable stores.

The sources requested anonymity because the negotiations are confidential. Toys R Us declined to comment.

Toys R Us filed for bankruptcy in September, weighed down by $4.9 billion in debt. Those obligations were a vestige of its $6.6 billion acquisition by KKR & Co., Bain Capital and real estate investment trust Vornado Realty Trust in 2005.

Under bankruptcy protection, the retailer had thought it would be afforded the financial flexibility to drive its turnaround. Toys R Us is opening "play labs" to make its stores more "experiential," a favorite buzzword among retailers trying to create reasons for shoppers to come through the door as more sales shift online.

But the crucial holiday season was dismal for Toys R Us, and the bankrupt toy store missed significantly on every number that mattered. Sales, traffic and profit all dropped far past what the retailer had told its lenders to expect.

Amazon and big-box retailers Target and Walmart can slash toy prices to reel in customers during the holiday season. These retailers use the toys as bait, hoping shoppers will also scoop up other higher-priced products. Toys R Us doesn't have any such luxury.