A new program from the Small Business Administration will offer floorplan financing with government-guaranteed loans for eligible boat, auto and recreational vehicle dealers.
"By filling a gap in the credit markets that has existed since at least last September, this new SBA program will allow dealers and manufacturers to plan over a longer term and, in doing so, sell more, make more and create more jobs," stated U.S. Rep. Joe Donnelly, the Indiana Democrat who was instrumental in creating the program.
Beginning July 1, SBA Dealer Floor Plan loans will come with a 75 percent government guarantee and a maximum repayment term of five years. DFP loans will be available for a minimum of $500,000 up to the $2 million allowable under the 7(a) program. The loans will be made only for titleable inventory such as boats or boat trailers.
"The availability of floorplan loans through this SBA program will provide marine dealers with a potential source of financing urgently needed by many, and stimulate orders to manufacturers who will build and ship new product," said Thom Dammrich, president of the National Marine Manufacturers Association, in a statement.
He said the initiative was a collaborative effort between the SBA, Congress, the NMMA, the National Marine Bankers Association, the Marine Retailers Association of American and the Recreational Vehicle Industry Association.
To be eligible for a DFP loan, dealers must be a small business with total annual receipts under $7 million or a tangible net worth not in excess of $8.5 million and an average net income after federal income taxes for the preceding two complete fiscal years not in excess of $3 million.
Interested dealers can apply to one of the 1,200 financial institution approved to make SBA 7(a) loans.
To learn more about the pilot program, download SBA's fact sheet and frequently asked questions. Click here to view a list of SBA-approved 7(a) lenders.
For information, contact SBA at (800) 8-ASK-SBA or contact the NMMA's Cindy Squires at (202) 737-9766 or firstname.lastname@example.org.