Federal loan funds of US$2.1bn will be distributed to critical General Motors suppliers through the automaker.

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Sources told Reuters the government would supply $2bn while GM would put $100m of its own funds into the bailout programme, under a requirement that any participating automaker should provide 5% matching funds to the government money.


After months of lobbying by parts makers, the Obama administration finally, on 20 March, pledged up to $5bn in federal loan aid.


Sources told the news agency GM had briefed a few hundred suppliers targeted to participate in the programme and was working with Citigroup to determine how to distribute the $2.1bn.


GM spokesman Dan Flores told Reuters only that the automaker was in discussions with treasury officials to finalise the programme in the near future.

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According to the report, the treasury has said that suppliers are required to pay 2% to secure a government guarantee of the receivables they are owed. For a higher payment of 3%, they can opt for immediate payment from the fund.


Terms for the programme are expected to be finalised in the next few days, and money could be made available to the suppliers about a week and a half after that, a source told Reuters.