GE Capital said it received approval for the Federal Deposit Insurance Corporation's temporary liquidity guarantee program under which the government guarantees certain banking debt.
GE Capital can issue up to $139 billion of government guaranteed debts, the unit of General Electric said in a statement. The program will be effective on or before Nov. 14.
"This will allow us to source our debt competitively,” the company said.
GE owns two banks under GE Capital.
It is unclear whether GE Capital is the first non-bank finance institution approved under this government guarantee program.
GE is the parent company of CNBC.
Cost of Insuring GE's Debt Drops
The cost of insuring GE's debt with credit-default swaps fell after reports of the FDIC move. The price to insure $10 million of GE debt for five years with credit-default swaps fell to $395,000 annually, down 7 percent from $425,000 earlier.
The Fairfield, Conn.-based company has been hammered this year as the credit crunch has taken a heavy toll on its hefty GE Capital finance arm, which has businesses ranging from making loans to midsized companies to investing in commercial real estate.
(GE Capital has been approved for the FDIC's temporary liquidity guarantee program. Watch the accompanying video for more...)
The lockup of the credit markets and the collapse of Bear Stearns early this year prompted the company in April to report an unexpected quarterly loss that stunned Wall Street as it was unable to close real estate deals.
GE has since taken a number of steps to improve its liquidity, including selling $15 billion in additional shares—with $3 billion in preferred stock going to billionaire Warren Buffett's Berkshire Hathaway.
The company, which also makes products ranging from jet engines to windmills and runs the NBC Universal media business, has moved to scale back its exposure to financial services, which it wants to reduce to about 40 percent of profit next year, down from half last year.
That is a target that some investors say could be achieved as a byproduct of the unit's troubles.
It is also working to reduce its reliance on the commercial-paper market.
GE management, led by Chief Executive Jeff Immelt, has contemplated, but not taken, more drastic steps, such as seeking a bank charter that would give it access to government lending channels.
- Reuters contributed to this report.