The U.S. Department of Energy announced the rules for its $25 billion loan to car manufacturers on Wednesday. The rules could allow automakers to see money from the loans before the new year.
"We are prepared to act on anything we get immediately if it is a good quality application," a government official said.
The loans are designed to help automakers create more fuel-efficient, less polluting vehicles. Vehicles built with loan money will need to get at least 25 percent better gas mileage than the law requires.
The loans cannot be used for cash to keep struggling carmakers, like GM or Chrysler, from bankruptcy. One of the requirements for the loan is that the automaker proves its finances are in order and will remain so through the period of the loan. The loans are available to domestic or foreign-based automakers who have production facilities in the U.S., and money from the loans can be used for creating or restarting factories.
Under the current rules, carmakers can borrow up to 80 percent of the cost of a new technology, and the terms can be as long as 25 years. The loans have an interest rate of about four percent. The rules set aside $2.5 billion for small automakers with less than 500 employees,
The Detroit News Reports.
