The U.S. Small Business Administration will offer government guaranteed loans to finance inventory for eligible auto, recreational vehicle, boat and other dealerships under a new pilot program announced recently by SBA Administrator Karen Mills. Dealer Floor Plan financing will be available beginning July 1, according to Mills.
Floor plan financing is a line of credit that allows dealers to borrow against their inventory and repay that debt as they sell their inventory or borrow against the line of credit again to add new inventory.
Under the DFP pilot program, the SBA will provide loan guarantees for lines of credit through its 7(a) program. DFP loans will be made through SBA lenders only for titled inventory, including autos, RVs, manufactured homes, boats and motorcycles. The pilot program will be available through Sept. 30, 2010, at which time the SBA will make the determination of whether or not to extend the program.
During a recent discussion with local small-business owners, Mills provided information on other SBA loan programs and benefits provided by the Recovery Act. Specifically, small business owners can take advantage of higher government guarantees on some 7(a) loans, as well as reduced fees on both 7(a) and 504 loans. The agency is also providing more tools to help small businesses compete for federal government contracts, along with technical assistance and counseling for business owners and entrepreneurs to help them deal with the economic challenges they face.
For more information, visit www.sba.gov/ms.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
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