WASHINGTON — The Small Business Administration announced a pilot program today that offers government-guaranteed loans to finance inventory for eligible boat, auto, RV and other dealerships, according to a release from the National Marine Manufacturers Association.
The program, set to begin July 1, will be administered through SBA’s 7(a) program.
The Dealer Floor Plan loans, or “DFP 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. DFP loans will be made only for titleable inventory such as boats or boat trailers.
Rep. Joe Donnelly, D-Ind., whose state is home to a number of boat, RV and other manufacturers, was instrumental in creating the program, the NMMA reported.
“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," Rep. Donnelly said in the release.
To be eligible for a DFP loan, dealers must have 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 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.
“The availability of floor plan 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,” NMMA president Thom Dammrich said in the release. “We applaud the Small Business Administration for taking this action and thank Congressman Donnelly and other Members of Congress for their tireless efforts to make this crucial program a reality.”
The NMMA has a number of resources available on its Web site for dealers interested in learning more about the program, including an SBA fact sheet and frequently asked questions. To view a list of SBA-approved 7(a) lenders, go here.
- For more of the latest news, click here.