An amendment to the Small Business Lending Fund Act of 2010, offered by Sen. Mary Landrieu, D-La., outlines a number of NMMA-supported changes to the Small Business Administration's Dealer Floor Plan Program, including raising loan caps from $2 million to $5 million, ensuring a 100 percent advance rate and extending the program to 2013, the association said.
"One of the most important aspects of the small business bill is the extension and the expansion of [SBA 7a] loans," Landrieu said during debate on the bill. "To put this in plain English, these are the loans that the Small Business Administration partners with banks to make what we call floorplan lending. It is any business that has inventory - maybe it is a tractor company or a manufactured home company or a boat, marine industry with a small business owner - and you have some of these in Illinois, I know, Mr. President, and I have many of them in Louisiana - that has to buy inventory and put it in their showrooms for when people come by and they look at the product."
"They look at all these products they want to buy - boats, tractors, for example. They do not usually push the button to buy these products on the Internet; they go down to their local dealer," she added. "They want to walk into a showroom. They want to look at the product. They heard about it and they might have documents from the Internet. They go to their local small business, whether it is in some parts of Illinois or Louisiana down in Thibodeaux, Violet, Larose. They walk into that local marine operator and say: I have looked on the Internet and this is the kind of boat I want to buy. Do you have one in stock? If we pass this bill, he might have one in stock. If we do not pass this bill, chances are he will not be able to make that sale. That is what the [7a] lending program does."
Click here to read the NMMA's letter of support to Sen. Landrieu.