Chrysler said it remained in talks with the US Treasury to finalize its own $4 billion loan agreement and expected to receive its share of the funding soon.

"The discussions relating to Chrysler LLC have been positive and productive and we look forward to finalizing the details of our financial assistance in the immediate future," Chrysler spokeswoman Shawn Morgan said in a statement.

US Treasury Department spokeswoman Brookly McLaughlin confirmed the government had completed the first $4 billion loan to GM on Wednesday.

"We're working expeditiously with Chrysler to finalize that transaction and we remain committed to closing it on a timeline that will meet near-term funding needs," McLaughlin said in a statement.

GM had warned that its cash would fall below the $11 billion it needs to keep on hand to stay afloat by Wednesday without government funding.

Both GM and Chrysler have said they needed the infusion of government cash to meet payouts to suppliers at a time when a plunge in auto sales has drained their own cash holdings.

The Bush administration approved a $17.4 billion bailout for GM and Chrysler earlier this month.

Of that total, GM has been promised another $9.4 billion in government loans under that program in addition to the $4 billion payment made on Wednesday. The final $4 billion of the bailout approved for GM will require Congress to approve the funding.

Chrysler was given $4 billion from the US government after having asked for $7 billon. The bailout is Chrysler's second in 28 years.

Rival Ford Motor Co (F.N) has not sought government loans but has asked for a $9 billion line of credit it could tap if business conditions worsen.

Earlier on Wednesday, the Treasury also confirmed it had disbursed $6 billion in funds to GMAC LLC, the automotive finance company historically aligned with GM.

GMAC is now 51 per cent by Cerberus Capital Management, the private equity firm that also owns Chrysler.

Under the terms of the US government bailout, Chrysler and GM will have to submit restructuring plans to the government by mid-February and demonstrate that they are viable by end March.