WASHINGTON, Sept 23 Reuters Investment firm Monroe Capital LLC said on Monday it plans to launch a fresh fund of up to 1 billion to provide loans for smaller auto suppliers as the industry shifts from gasolinepowered to electric vehicles.

The White House said the fund would facilitate access to lower cost capital for small and mediumsized auto manufacturers to refinance, grow, and diversify their businesses and noted that more than 250,000 people across the United States work for small and mediumsized auto suppliers.

The Drive Forward Fund LP is expected to be backed by lowcost governmentguaranteed lending through a U.S. Small Business Administration license for the fund.

Also Monday, the U.S. Treasury Department announced a 9.1 million grant to launch the Michigan Auto Supplier Transition Program to help smaller firms secure financing for EV components39; production.

New U.S. government tariffs on Chinese EVs and on batteries, components and critical minerals along with restrictive EV tax credit rules are prodding automakers to shift their supply chains. Automakers face stringent new emissions rules that are also pushing them to build cleaner vehicles requiring new parts.

We believe this new Drive Forward Fund will be critical to catalyzing growth and innovation within America39;s automotive supply chain, Monroe CEO Ted Koenig said.

Chicagobased Monroe said unlike larger manufacturers, small and mediumsized auto suppliers often lack access to finances, hindering…