The Courier understands staff were told yesterday the business was closed.

Peterson Motor Group incorporates Ballarat Kia, Ballarat Chrysler, Ballarat Jeep and Ballarat Dodge.

Dealer principal, Danny Peterson would not confirm the closure, however, a staff member told The Courier the business had closed.

It is not clear how many staff are employed by the business.

The closure comes just after the Victorian Automobile Chamber of Commerce yesterday warned up to 50 Victorian new car dealerships could be forced to close after GE Money and GMAC Financial Services announced they would

pull their funding to dealers for new stock on December 31. VACC chief executive director David Purchase said the situation for some dealers was dire.

"If dealers don't have dealer finance they can't operate, so it's critical," he said.

"There are about seven or eight major finance companies, the whole market is worth about $6 billion and those two accounted for about $2 billion.

"It's a very competitive market at the moment. Margins are paper thin and this could not come at a worse time. Sales of new market vehicles have been falling, with October passenger vehicle sales down by about 13 per cent."

Mr Purchase said the announcement by GE Money and GMAC Financial Services was first made three weeks ago and pressure was being applied to the Federal Government to assist dealers in finding new lines of credit for new

cars.

"The Federal Government is very well aware of the problem and we are working on a proposal with them to try and assist.

Mr Purchase said he was not aware of the reasons surrounding the closure of Peterson Motor Group and the VACC would make contact with them today.

Ballarat MHR Catherine King said the government was doing what it could to help.