(Reuters) - Sears Holdings Corp SHLDQ.PK is finalizing a deal with financial firm Great American Capital Partners and other lenders for $350 million in critical bankruptcy financing that would keep the U.S. retailer open through the holidays, people familiar with the matter said on Wednesday.

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The deal would increase an existing financing package from banks to give Sears a bankruptcy loan totaling $650 million, the sources said. Bank lenders already promised $300 million when Sears filed for bankruptcy last month.

The loan discussions come as the 125-year-old retailer has been facing calls to wind down its business from a key group of its creditors, including bondholders and landlords. The creditors believe they will collect more on what they are owed if Sears liquidates its assets, according to bankruptcy-court papers.

The loan from Great American Capital Partners, an affiliate of liquidation specialist Great American Group and financial services firm B. Riley Financial Inc RILY.O, and its partners would give Sears extra breathing room to seek buyers for its assets. Sears picked Great American's proposal for a bankruptcy loan instead of an offer from hedge funds including Cyrus Capital Partners LP, the sources said.

Sears and the lenders are putting the finishing touches on the deal, and there remained a chance the negotiations could collapse or the terms could change, the sources said.

Representatives for Great American and Cyrus did not immediately respond to a request for comment. A Sears spokesman declined to comment.

A U.S. bankruptcy judge is set to hear arguments for approving Sears’ bankruptcy loan on Nov. 27. Sears on Thursday plans to ask the judge to approve plans for eventually selling assets.

In exchange for the $350 million loan, Great American and the firms lending with it are expected to receive some Sears collateral previously held by banks to back the new financing, one of the sources said.

Sears Chairman Eddie Lampert, a billionaire who runs hedge fund ESL Investments Inc, is working “around the clock,” with possible lenders to finance a bid to keep Sears in business, according to bankruptcy-court papers.

Lampert, Sears’ chief executive until it filed for bankruptcy, has loaned the company billions of dollars over the years, and plans to use some of the money he is owed to finance his offer for company assets, according to court papers.