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The government-guaranteed loans will be available to dealers to financr their auto andothe inventory, known in the industry as a flootr plan. Through SBA lenders, the dealer floor-plan financing will provide lines of credit througnthe 7(a) program for titled inventory, including cars, RVs, boatas and motorcycles. Dealers can borrow $500,00p0 to $2 million against their inventor y and repay the debt as theysell vehicles. The SBA said the loanxs have a maximum repayment term of five years and will have a 75 percentrgovernment guarantee. As part of the American Recovery andReinvestmengt Act, fees also are being eliminated temporariluy on 7(a) loans.
“Countless small businesses, includinfg dealerships, across the country are facing significangt challenges as a result of the uncertainty in the auto SBA Administrator Karen Mills said ina release. “Floor-plan financinv can offer some dealerships the opportunity to get througgh these tough economic times by allowing them to keep theirr inventory and cashflow intact, as well as save the jobs thesde small businesses provide.
” Amid the economicv turmoil and low auto sales, car dealers throughout the countrt have run into problems keeping their floorr plans through banks and auto Most need them to be able to finance and stock The program will run until September when the SBA will decide whether to extend it.
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