The United States Treasury Department will provide auto suppliers with up to $5 billion in credit to help them continue operating while automakers restructure their businesses during a time of reduced sales. The program is limited to automakers that have received loans through the Treasury’s Troubled Assets Relief Program (TARP), currently General Motors and Chrysler and their direct suppliers.
The program is intended to make sure auto suppliers have access to cash while the automakers and the Obama administration weigh a broader plan to aid the car companies. The “Supplier Support Program” will be administered by the participating automakers since they have a direct relationship with their Tier 1, 2 and 3 suppliers and should know which suppliers need the most aid.
Suppliers interested in participating should contact their lenders to determine whether they can obtain requisite consents to sell their receivables. Once they have done so, they should contact the procurement officer at the participating auto company. Click here for more information.
Most SEMA members are not direct suppliers to the automakers. Nevertheless, the Obama administration has taken other steps to provide credit relief to the small-business community. While the relief is through Small Business Administration loans, it is expected to help unfreeze the broader credit markets as well.
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