Posts Tagged ‘floor plan’

SBA Launches Dealer Floor Plan Program

July 1, 2009

Government Guarantees Up To 75% of Loans
Move Is Expected To Free Up Money for Dealers

July 1, 2009— The Small Business Administration (SBA) today launched its pilot program designed to increase dealer access to floor plan financing. Details were provided this morning in a conference call with news media representatives and SBA staffers.

As many as 4,000 loans could be guaranteed under the program that runs through Sept. 30, 2010, said Eric Zarnikow in response to one of my questions. Zarnikow, the SBA’s associate administrator for capital access, said the agency is limited to backing only 10% of the total number of loans it makes under its 7(a) program, which would be about 4,000 at the current rate of processing.

The SBA will evaluate the program next year and determine whether or not it should be retained or dropped. “We’ll determine what to do at that time,” said Zarnikow.

Floor plan loans will be available for a minimum of $500,000 up to $2 million under the pilot program—dubbed by the SBA as its DFP (for Dealer Floor Plan). The loans will have a maximum repayment term of five years.

The loans will be made by local banks to dealerships, not by the federal government, but the government will guarantee a portion of (more…)