According to GM's National Dealer Council, GM may lose as many as 40 percent of its 6,500 U.S. stores if GMAC LLC defaults.

"There's so many dealers on the edge, if GMAC goes out of business 30 to 40 percent of dealers won't be able to get financing from anywhere else," Martin NeSmith, a member of GM's National Dealer Council, said in an interview with the Detroit News. "They'll go out of business."



GMAC announced yesterday that it lacks funding that is needed to become a bank holding company and to free up cash for dealer-inventor financing. GMAC is GM dealers'largest source of financing for buying and selling new vehicles.

The lending firm has said that plans for $38 billion in debt exchange to raise capital hasn't attracted much participation.