SBA announces new program to help dealers with floorplan financing
05/28/2009, 5:11 PM
By Drew Johnson
Vehicle financing has dried up for consumers and dealers alike, but the Small Business Administration has announced a new program to aid the latter. The SBA announced on Thursday a new government program to help dealers secure floorplan financing.
The pilot program will kick off July 1st and run through September 30th, 2010. If the deemed necessary, the SBA could extended to program.
“Countless small businesses, including dealerships across the country face significant challenges as a result of the uncertainty in the auto industry,” SBA Administrator Karen Mills said in a statement. “Floorplan financing can offer some dealerships the opportunity to get through these tough economic times by allowing them to keep their inventory and cash flow intact.”
According to Automotive News, the SBA plans to guarantee 4,500 loans during the first three months of the program. In the following 12 months, the SBA will likely guarantee about 7,500 loans. Under the terms of the agreement, the U.S. government will guarantee up to 75 percent of loans between $500,000 and $2 million, with a maximum repayment term of five years.
