LOS ANGELES (CBS) — The state of California on Tuesday sought to secure a short-term bridge loan of $5 billion from private investors in the event of a possible default by the U.S. federal government.

State Treasurer Bill Lockyer told KNX 1070′s Ron Kilgore that despite the state’s gloomy economic outlook, there were no shortage of investors.

“The rate for an investor is .237 percent,” said Lockyer. “Now, that’s very low compared to what we paid a year ago where we were out for a little longer period of note at 1.4 percent then.”

A select group of banks, credit union and other investors promised a total of $5.4 billion, according to Lockyer.

The auction comes as the looks to get funding in place to avoid a cash crunch in the event the U.S. fails to increase its debt limit.

And even if Congress and the White House do get a deal into place, the funds could offset any federal aid lost to proposed state budget cuts.