Three more large investment firms have raised sufficient capital to participate in the joint partnership with the government to purchase toxic assets from banks.
The Treasury Department said Alliance Bernstein and BlackRock, both headquartered in New York City, and Wellington Management, based in Boston, had all raised the $500 million minimum to begin operations.
Those three firms join the first two to clear all the hurdles for participation last Wednesday, Invesco and the TCW Group.
The goal of the program is to rid banks of bad loans so they can resume more normal lending, which is key for sustaining any economic recovery.
With the three new additions, the total purchasing power to obtain banks' soured assets has increased to $12.27 billion, Treasury said.
The government effort, known as the Public-Private Investment Program, or PPIP, has been plagued by delays and some analysts wonder how successful it will be in buying banks' bad assets.
But Treasury officials have expressed optimism about the program, predicting that the remaining four firms who are seeking to participate will qualify by the end of this month.
"The PPIP continues to grow," Treasury Assistant Secretary Herb Allison said in a statement Sunday. "Private capital is being drawn into the market for legacy securities and taxpayers are being given a chance to share in the profits."
In July, Treasury said that nine firms had qualified to participate in the PPIP program and they were given time to raise at least $500 million each, money that will be matched from the government's $700 billion bailout program.
The announcements in recent days that funds have begun to receive support from the government comes a year after Congress first approved the bailout effort, known as the Troubled Asset Relief Program.
Then-Treasury Secretary Henry Paulson had obtained congressional approval for the effort by saying its major goal would be to buy bad assets from banks.
However, that goal was shifted almost immediately to direct injections of capital into banks after government officials decided that the financial crisis was worsening too quickly and it would take too long to get the toxic asset purchase program up and running.
Treasury said that so far private investors in the five firms have come up with $3.07 billion, which Treasury has matched equally.
In addition, the firms will be able to borrow an additional $6.13 billion from Treasury to bring the total amount available to purchase toxic assets to $12.27 billion.
The government's current goal is to provide $30 billion in Treasury investment to all of the funds participating. With contributions from the private sector, that would push the total available to buy toxic assets to $40 billion.