GMAC, the major financing arm of General Motors, was recently approved as a bank holding company, giving it access to government funds.  The government has wasted no time in getting the cash flowing.

The U.K.'s Guardian reports, "Last night the Bush administration announced it was pumping $5bn into GM's finance arm GMAC and lending a further $1bn to GM to help it buy shares in GMAC, which is considered key to the carmaker's survival. The credit crunch has sharply limited GMAC's ability to provide financing for car buyers at GM dealerships or other kinds of funding."

The Associated Press adds that the move is "expected to stave off a bankruptcy protection filing at the company but also severely limit GM's control over it."  The Los Angeles Times notes that a GMAC bankruptcy could have been particularly disastrous as GMAC "provides credit to about 5,000 auto dealers to finance showroom inventory and has about 15 million auto and residential loan customers. . . .dealers have estimated that 2,000 to 2,500 dealerships might fail if GMAC filed for bankruptcy."

However, the new money could be good news for consumers.  AP reports, "The government aid is also expected to provide a needed boost to domestic auto sales by freeing up more credit for consumers. GMAC said Tuesday that it would immediately resume lending to certain customers it had previously said were too great a risk for auto loans as a result of the tight credit markets." 

If you're in the market for a GM car but worried about getting a loan, check out the Best Car Deals for offers and incentives now that GMAC is ready to start lending again.