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RV dealers -
new effort to increase
access to inventory
financing
Small Business
Administration’s (SBA)
Dealer Floor Plan (DFP)
Pilot Loan Programe
RV press releases / RV news articles
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2 /26/2011 -
The following article is from a press
release made by the
RVIA
"RV dealers - new effort
to increase access to inventory financing"
RVIA applauds the re-launch of the Small
Business Administration’s (SBA) Dealer Floor
Plan (DFP) Pilot Loan Program for the
improvements the new effort includes to
increase access to inventory financing for
RV dealers.
"The relaunched program includes significant
enhancements over the original program that
RVIA and the RV industry pushed to have
included -- the new maximum loan size of $5
million, the ability for RV dealers with a
higher net worth of up to $15 million to
participate, and the extension of the
program to three years," said RVIA President
Richard Coon. "We are hopeful these changes
will remove key barriers to lender
participation, thereby attracting more
lending sources and providing RV dealers
with additional floorplan opportunities."
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The Small Business Jobs Act of 2010 included a
provision for re-launching SBA’s Dealer Floor
Plan (DFP) Pilot program, which first became
available in July 2009. The pilot is part of the
SBA’s overall 7(a) loan guaranty program.
Key provisions of the re-launched
program, which RV dealers and lenders now have
access to, include:
• A loan amount between $500,000 and $5 million
(previously limited to $2 million), for a term
of not more than 5 years.
• A new size standard allowing larger businesses
to qualify as a small business under the new
DFP, as follows: the maximum tangible net worth
of the business cannot exceed $15 million; and,
the average net income after federal taxes
(excluding carry-over losses) for the 2 full
fiscal years prior to the date of the
application for DFP is not more than $5 million.
• An advance rate of up to 100%of the value of
the goods to be purchased may be offered by
lenders.
• An SBA guaranty of 75% on floorplan lines of
credit. In the original DFP, the guaranty for
RVs, boats and manufactured homes had been 60%
while autos had the 75% rate. Now, all have the
75% guaranty.
• In addition to the acquisition of titleable
inventory for retail sales, loan proceeds can
now also be used to refinance existing floorplan
lines of credit with another lender or to
refinance/replace existing floorplan lines of
credit with the same lender. |
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• An extension of the DFP program to September
30, 2013 (was September 30, 2010).
• A floorplan lender with at least $1billion in
floorplan lines of credit in its current
portfolio may qualify for delegated authority
under the new DFP Pilot, which will expedite the
loan approval process for small business owners
and allows more autonomy for lenders. Delegated
floorplan lenders can use SBA Express forms and
utilize their own policies, procedures, internal
controls and documentation.
• “Eligible retail goods” that can be purchased
under the new DFP are still automobiles,
recreational vehicles, boats, and manufactured
homes which can be titled under state law.
“This is the second generation of the SBA DFP
Pilot Program,” said Dianne Farrell, RVIA’s vice
president of government affairs. “In speaking
with SBA staff, they are confident that the
enhancements better meet the needs of the
banking community and will lead to more
floorplan financing options being available to
dealerships, which are the cornerstone of many
local business communities.”
A coalition of trade associations, including
RVIA, RVDA, marine, auto, trailer and
manufactured housing dealers and manufacturers
worked to ensure the new DFP program contained
these improvements.
The rules and regulations for the pilot are now
available on the website of The Federal
Register, and in print editions. A procedural
guide to the program will be posted on the SBA
website at:
http://www.sba.gov/content/dealer-floor-plan-financing-program-0.
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.
"RV dealers -
new effort to increase access to
inventory financing"
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