The U.S. Treasury Department has announced supplier support programs backed by government funds for both Chrysler LLC and General Motors that will guarantee receivables owed for any goods shipped after March 19.

Suppliers will have access to just $3.5 billion in federal aid, not the $5 billion originally planned because Ford Motor Co. has declined to accept its share of the funds. For its part, GM will pay in $100 million so its suppliers can access approximately $2 billion of the overall amount, with Chrysler suppliers using the remaining $1.5 billion.

"The U.S. Treasury Department is pleased that both GM and Chrysler have moved quickly to launch supplier support programs," said Jenni Engebretsen, a Treasury spokeswoman, in a statement issued Wednesday, April 8. "These efforts, backed by U.S. Treasury resources, will help stabilize the auto supply base and restore credit flows in a critical sector that employs more than 500,000 American workers across the country."

Neil De Koker, president of the Original Equipment Suppliers Association headquartered in Detroit said the funds cannot come soon enough as most suppliers are on the verge of suffering a cash crisis with vehicle production cuts of 50% to date in 2009 decimating their profits.

Suppliers will be able to use the program in two ways, paying a 3 percent fee to get paid faster than the normal 45-day cycle for parts delivered, or using the funds to guarantee receivables as collateral for loans.