GMAC LLC could get federal funds as early as May 16, said one person familiar with the matter.

The size of these funds isn't yet known.

The government said it would provide more financing to GMAC after the company last week assumed the mantle of lender for Chrysler LLC dealers and consumers as the auto maker restructures in bankruptcy court.

GMAC's status as a government-sanctioned financier of General Motors Corp. (GM) and Chrysler vehicles puts the lender in a unique situation. It also underscores the extraordinary steps being taken by the government to support the strapped company. GMAC is vital to federal efforts to resuscitate ailing auto makers GM and Chrysler.

This is because GMAC provides the bulk of the financing to GM dealers, the life blood of auto sales. In 2008, GMAC provided 81% of the financing to the auto maker's dealers. Dealerships use these loans to maintain a stockpile of new GM cars on their lots. Starting mid-May, GMAC is slated to finance Chrysler dealers, pending the federal funds.

Earlier Friday, U.S. Treasury Secretary Timothy Geithner said the government will provide "substantial support" to GMAC.

"It's likely, again, that GMAC will need to take additional capital from the government and we'll be prepared to provide that," said Geithner in an interview with Reuters Television.

"We expect the additional capital raised will further strengthen GMAC and help ensure continued availability of credit to our customers," said Gina Proia, a GMAC spokeswoman.

In addition, GMAC, on the heels of its bank registration in December, received $5 billion under the Treasury's Troubled Asset Relief Program, or TARP. In exchange, the Treasury received GMAC preferred stock.

The financial support it receives from the government would also help offset the large $11.5 billion capital hole that GMAC has to fill under the stress-test results released Thursday.

Regulators ordered 10 of the U.S.'s 19 largest financial institutions to raise a combined $74.6 billion in capital to cushion themselves against potential losses in the event of a deeper economic slump.

Under the stress-test results for GMAC, the government's "more adverse" scenario includes two-year cumulative losses of 6.6% on total loans. This is lower than the 10% estimates for Bank of America Corp. (BAC) or the 10.9% calculated for Citigroup Inc. (C). Citigroup's capital shortfall, under the stress-test results, totaled $5 billion, while Bank of America's would have to shore up capital by $34 billion.

GMAC is jointly owned by GM and an investor group led by private-equity firm Cerberus Capital Management LP. The auto maker and the investor group will significantly scale back their ownership in GMAC by the end of this month as a condition of the lender becoming a bank-holding company.

The lender reported a wider first-quarter loss of $675 million, from a $589 million loss in the year-earlier period. Its results were aided by a $631 million after-tax gain from retiring debt.

In addition, GMAC also is in line to gain access to a federal program that has allowed an array of financial institutions to get financing when they were otherwise shut out from repaying or refinancing debt as a result of the credit crisis. More than four months after turning itself into a bank, GMAC still is waiting for the green light from the Federal Deposit Insurance Corp. to issue FDIC-insured debt under this program. According to the program's guidelines, as time passes without such approval, the amount of debt that GMAC can raise decreases.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com