Home » NEWS » Banking & Finance » SBA extends Dealer Floor Plan pilot program

SBA extends Dealer Floor Plan pilot program

JACKSON — A pilot loan program aimed at increasing access to inventory financing for auto, boat, RV and other dealerships will be re-launched tomorrow and will be effective through Sept. 30, 2013, the U.S. Small Business Administration announced.

The Small Business Jobs Act of 2010 included a provision for re-launching SBA’s Dealer Floor Plan (DFP) Pilot Loan program, which first became available in July 2009. The pilot is part of the SBA’s overall 7(a) loan guarantee program. The Jobs Act also increased the maximum size for 7(a) loans to $5 million, up from $2 million, which includes loans made through the DFP pilot program.

The rules and regulations for the pilot will be available tomorrow on the website of The Federal Register, and in print editions Wednesday.  A procedural guide to the program will be posted on the SBA website at www.sba.gov/content/dealer-floor-plan-financing-program-0.

Floor plan financing is a revolving line of credit that allows a dealership to obtain financing through SBA’s 7(a) program for inventory that can be titled, such as autos, RVs, manufactured homes, boats and trailers. As each piece of collateral is sold by the dealer, the loan advance against that piece of collateral is repaid. As the loan is repaid, the dealer can borrow against the line of credit to add new inventory.

The program is available to qualifying small businesses, including new and used automobile, motorcycle, RV, manufactured homes and boat dealers. SBA has issued a new maximum alternative size standard to allow businesses with $15 million net worth and $5 million in net income measured over two years to have access to the program.

All SBA-approved lenders may make DFP loans.  Lenders with more than $1 billion of floor plan lines of credit in their current portfolios may apply for delegated authority, which would expedite the lending process.

Borrowers interested in obtaining a DFP loan should contact their lender or their nearest SBA field office to get a list of SBA-approved lenders in their area who may be participating in the program. Local district offices and contact information, as well as information on this and other SBA programs and resources, can be found at www.sba.gov or by calling the SBA Answer Desk at 1-800-U-ASK-SBA or TDD 704-344-6640.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Wally Northway

Leave a Reply

Your email address will not be published. Required fields are marked *

*