The US Treasury is to give finance group GMAC $7.5bn in further state aid, to help it offer loans to potential Chrysler and GM car buyers.

GMAC, which is part-owned by General Motors, failed to meet the government’s “stress test” and the Treasury ordered it to raise $11.5bn in extra capital. But the firm failed to raise money privately as bad debt has risen, leading to quarterly losses of $675m.

This is the second time the government has intervened to help GMAC.
In December, the government stepped in with a $6bn bail-out of the firm.

While GM is trying to stave off bankruptcy protection, Chrysler has already filed for bankruptcy.