The loans will be a combination of short-term financing and guarantees of further loans at a later time.
President Bush is to source funds from the $700 billion Wall Street bailout fund.
The news comes a week after a £9.4 billion rescue package collapsed in the Senate. Now, President George W Bush has agreed to a rescue package, saying the failure of the car industry would not be ‘a responsible course of action.’
Funds will be in place by the spring, securing millions of jobs. American car makers have a strong presence in the UK, with representation from the Ford, Vauxhall, Chevrolet, Chrysler, Saab, Corvette and Jeep brands, amongst others.