The US Senate has decided to approve $350 billion more of bailout money for the automobile industry. The budget, which is the second round of federal funds, is set to be released this year.

Sources say that the federal funds will be used to provide loan grants to automotive suppliers, auto finance companies and automakers.

The first $350 billion funds were released to fund emergency loans to automotive companies such as Chrysler LLC an General Motors.

The second round of $350 billion was released after aids to new President Barack Obama ensured that the funds will strictly be controlled, insiders say.

Obama designee National Economic Council Chairman, Larry Summers, said in a letter that the second $350 billion funds will not be allocated to industrial policies. He also said that the automobile companies will only receive the additional aid provided that they have a concrete reconstruction for long-term viability.

The releasing of the second bailout funds was met with uncertainty as criticism of how the Bush administration handled the first $350 billion arose. Reports have said that the first funds were used in bank investments instead.

Part of the second federal funding is set to be used for a loan to Ford Motor Corporation. Although the pioneering automobile company has yet to ask for an immediately loan, it has already expressed interest in a $9 billion loan should the market conditions prove to be worse.

Obama, citing that the first release of funds lack transparency and accountability, said in a statement that he will provide loans instead to small businesses. He said that to keep the faith of American tax payers, it is necessary that they see where their taxes go.