Editor's note: An earlier version of this story incorrectly said the legislation would increase the portion of each loan backed by the U.S. government. The portion remains 75 percent.
WASHINGTON -- President Obama today signed legislation that will raise limits to $5 million on federally guaranteed loans available to thousands of small auto dealers as the administration attempts to loosen credit in a sputtering economy.
The previous floorplan financing limit in the U.S. Small Business Administration pilot program was $2 million.
The 17-month-old program hasn't gotten off the ground because banks, credit unions and other lenders have been reluctant to participate.
The Obama-backed bill, which contained provisions aimed at creating jobs as well as easing credit, passed the House and Senate over almost completely unified Republican opposition as the Nov. 2 congressional elections approach.
"We still need banks to lend," said Bailey Wood, spokesman for the National Automobile Dealers Association. "The fact is, many credit worthy dealers are still having a tough time getting the credit they need to purchase vehicle inventory."