The design of spacecraft docking missions using multibody simulations needs to be complemented by Hardware-in-the-Loop (HIL) verification test using real docking hardware. While docking simulation is challenged by use of representative contact dynamic models, the HIL testing is challenged by proper contact force inclusion to the microgravity motion simulation of the free-floating docking spacecraft. Existing docking HIL simulators mostly use compliance devices to reduce impact forces, which changes the actual contact force. In the current paper, we investigate HIL setup for small satellites docking which requires fast and precise HIL closed loop contact simulation without artificial compliance. A nonlinear contact model has been selected out of nine different contact models to simulate more realistic contact dynamics. We study and analyze a 1DoF HIL testbed for contact dynamics validation, as well as HIL testbed stability analysis verification. Actuator modeling has also been included. Finally, the preliminary actuator requirements of the HIL testbed are defined. The results will be used for follow-on design and realization of a HIL testbed at Technical University of Dresden in cooperation with Airbus Defence and Space, Friedrichshafen, Germany.