Inventory Floor Planning Solutions

Archive for May, 2009

The U.S. Small Business Administration is committed to providing small businesses with the tools and resources they need to survive in the current economic climate. Starting on July 1, 2009, through the Dealer Floor Plan, SBA will offer government-guaranteed loans to finance inventory for eligible auto, recreational vehicle, boat, manufactured home and other dealerships.

The DFP is a pilot program that allows dealers to borrow against retail inventory and acts as a revolving line of credit for a dealer to obtain financing for retail goods. The dealer repays the debt as the inventory is sold and can borrow against the line of credit to add new inventory.

How it will work:

Under the DFP pilot program, SBA will provide loan guarantees for lines of credit through its 7(a) program. DFP loans will be made through SBA lenders only for inventory that can be titled, such as autos, RVs, manufactured homes, boats and trailers. The pilot program will run through Sept. 30, 2010, at which time SBA will determine whether to extend the program.

DFP loans will be available for a minimum of $500,000 up to the $2 million allowable under the 7(a) program. With a maximum repayment term of five years, the loans will come with a 75 percent government guarantee. Borrowers will also benefit from the temporary elimination of fees on 7(a) loans made possible by the American Recovery and Rein­vestment Act of 2009.

Who it will help:

The DFP program allows SBA lending partners to prudently extend a critical line of credit in these tough economic times to viable dealerships in a number of industries, including RV, auto, boat and manufactured homes. It will help re­store their cash flow and in turn, save their business and countless jobs. For auto dealerships, in particular, it will provide the access to capital many of them need at this critical time as they go through the transition brought on by larger changes within their industry.

Because of the severe decrease of dealer floor plan financing over the last several months, each of these loans most likely will keep open a viable business that would have otherwise closed.

All loans will be made through SBA lenders to creditworthy dealerships meeting lender requirements, demonstrating sound finances and following viable business plans.

For more information, go to www.sba.gov.

Technorati Tags: floor plan financing, Floorplan Financing, SBA, Small Business Administration

KOKOMO, IND. – 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 today by SBA Administrator Karen Mills.

Dealer Floor Plan (DFP) financing will be available beginning July 1, according to Mills. She announced the new program during a visit to Kokomo, Ind., with Dr. Ed Montgomery, President Barack Obama’s Director of Recovery for Auto Communities and Workers.

“Countless small businesses, including dealerships, across the country are facing significant challenges as a result of the uncertainty in the auto industry,” Mills said. “Floor plan 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, as well as save the jobs these small businesses provide.”

Mills and Montgomery discussed the new DFP pilot program, as well as other resources offered by SBA and the federal government to help small businesses in communities impacted by the troubles facing the auto industry.

“Small businesses are the engine of our economic growth,” Dr. Montgomery said. “We are committed to finding ways the federal government can cut through red tape and get resources to these companies quickly during these tough economic times. From supporting nearly $4 billion in lending to small businesses across the country since February to the Dealer Floor Plan financing announced today, the SBA is making the resources provided in the Recovery Act accessible and working to provided needed credit. The President is committed to continuing to work with federal officials to identify resources like these that make a real difference in the lives of our auto communities and workers.”

Floor plan financing is a line of credit that allows dealers to borrow against their inventory, and then 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 titleable inventory, including autos, RVs, manufactured homes, boats and motorcycles. The pilot program will begin July 1 and will be available through Sept. 30, 2010, at which time the SBA will make the determination of whether or not to extend the program.

DFP loans will be available for a minimum of $500,000 up to the $2 million allowable under the 7(a) program. With a maximum repayment term of five years, the loans will come with a 75 percent government guarantee. Borrowers will also benefit from the temporary elimination of fees on 7(a) loans made possible by the America’s Recovery and Reinvestment Act of 2009.

During a roundtable discussion later in the afternoon 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.

“We are committed to being the real partner small businesses need at this critical time,” Mills said. “Floor plan financing is just the latest tool in our toolbox to help small businesses in communities like Kokomo weather this recession and drive our nation’s economic recovery.”

Documents:

dfp_fact_sheet

dfp_faqs

dfp_pressrelease_052809

Technorati Tags: floor plan financing, Floorplan Financing, Inventory Financing, SBA, Small Business Administration

For any one looking for Chrysler Dealer list here is a down loadable Excel file which can be sorted by Dealer, Majority Owner, Address, Brand, State or Zip Code.

Chrysler Dealer Hit List Excel file

Technorati Tags: Chrysler, Chrysler Dealerships Closing LIST

Here are the the number of Chrysler Dealers per State on the list to be closed.

PHILIP NUSSEL

AUTOMOTIVE NEWS

MAY 8, 2009 – 1:02 PM ET

Just three days after dodging bankruptcy by restructuring its debt, Sonic Automotive Inc. today said it ended two quarters of losses by posting a $1.7 million profit.

The nation’s No. 3 auto dealership group credited the results to efforts to build local dealers’ market share in a shrinking market. Sonic also continued cutting costs and raised its target for cost reductions during the current year by an additional $10 million, to $135 million.

The $1.7 million first-quarter profit compared with net income of $12.6 million a year earlier and followed combined losses of $711 million in the previous two quarters. Revenue plunged to $1.18 billion, down 25 percent from the same quarter a year ago.

On Tuesday, Sonic avoided bankruptcy when bondholders allowed the Charlotte, N.C.-based dealership group to postpone a $90 million debt payment until 2012. On April 1, Sonic warned of a possible bankruptcy if it wasn’t able to restructure debt that would have matured this week.

Sonic’s profit came as U.S. vehicle sales rates fell to 27-year lows. Overall U.S. sales plunged 37.4 percent during the first four months of the year compared with the same four months of 2008.

“Our continued focus on executing the basic blocking and tackling of our playbook produced solid results in the most difficult automotive business environment in at least a generation,” Sonic President Scott Smith said in a statement. “Our advertising and Internet marketing initiatives resulted in 83 of our dealerships taking share by exceeding their local markets for the quarter. Our used-vehicle business continues to outperform the industry.”

Over the past six months, Smith said, Sonic has cut 10 percent of its work force. He added: “We now have fewer people making more money.”

Sonic said new-vehicle sales plummeted to 16,801 during the quarter, down 30 percent from the first quarter of 2008. Used-vehicle sales remain relatively stable at 15,155, compared with 15,782 sold a year ago.

Sonic ranks No. 3 on the Automotive News list of the top 125 U.S. dealership groups for 2008.

Source: Automotive News

Technorati Tags: Sonic Automotive

LINDSAY CHAPPELL

AUTOMOTIVE NEWS

MAY 7, 2009 – 2:33 PM ET

CHATTANOOGA, Tenn. — Conceding that some of its U.S. suppliers may be too financially troubled to build their own parts plants, Volkswagen AG is seeking help from an unlikely source: real estate investors.

VW said it is asking private developers to build and own suppliers’ factories that would serve the automaker’s new U.S. assembly plant here.

Tom Loafman, purchasing director for Volkswagen Group of America, said the plan would help suppliers reduce their upfront investment. Developers would build parts factories to order and lease them to suppliers, he said.

Loafman said he is talking to suppliers and private investors around the South. VW remains flexible about structuring the financial arrangements, he added.

Nelson Bowers, a Volkswagen, Toyota and Kia dealer in Chattanooga, said he plans to take part in the effort.

VW wants a supplier park on a 1,000-acre parcel that the city of Chattanooga is making available next to the site of the new auto plant. The company seeks 80 percent local content for the mid-sized sedan the plant is scheduled to start producing in 2011.

The new sedan will share half its parts with the next-generation Jetta to be built at VW’s plant in Puebla, Mexico, Loafman said.

Scott Cooper, an economic development specialist with the Chattanooga Chamber of Commerce, is working with Volkswagen suppliers. Many of them, he said, face cash flow problems.

“Volkswagen recognizes that the situation is different now than when a lot of other new auto plants were built in recent years,” Cooper said. “They’re devoting a significant amount of time courting suppliers to this supplier park.”

VW has named only a few of its U.S. suppliers to the new plant. Last month, VW awarded M-Tek Inc., of Manchester, Tenn., a $147 million contract for door components. M-Tek has not decided whether it will build a dedicated facility at the Chattanooga site.

Source: Automotive News

Technorati Tags: Volkswagen

The Federal Reserve Board’s April 2009 Senior Loan Officer Opinion Survey on Banking Practices was released on 5/04/2009. The report addressed changes in the supply of, and demand for, loans to businesses and households over the previous three months. The survey also included two sets of special questions: The first set asked banks about their expectations for delinquencies and charge-offs on existing loans to business and households; the second set queried banks about international trade finance. This article is based on responses from 53 domestic banks and 23 U.S. branches and agencies of foreign banks.

Click here to read The Full Report

Source: http://federalreserve.gov/

Technorati Tags: Banks and Institutions, Federal Reserve System

JAMIE LAREAU

AUTOMOTIVE NEWS

MAY 5, 2009 – 5:32 PM ET

DETROIT — GMAC Financial Services is extending through May a policy that allows dealers to avoid making certain payments on aging inventory.

GMAC had suspended dealers’ so-called curtailment payments in April.

“That’s one of our means to help alleviate stress on dealers while they also reduce their inventory on aging vehicles,” said Sue Mallino, a GMAC spokeswoman.

A curtailment is a payment dealers must make on old inventory. For new vehicles, the curtailment normally would be assessed on all 2007 and 2008 model vehicles that dealers have financed for more than 18 months. The curtailment also would cover used vehicles from 2007 and 2008 that dealers financed for more than six months.

“For aging inventory, we began to acquire a percentage of the financing to be paid down, and that’s what’s known as a curtailment,” Mallino said.

That percentage can be up to 10 percent of the vehicle’s outstanding balance. So if it’s a $10,000 car, a dealer might pay $1,000 a month for 10 months and pay it off, Mallino said. The time frame depends on how much financing is still owed.

Source: Automotive News

Technorati Tags: floor plan financing, Floorplan Financing, GMAC Financial Services

WASHINGTON (May 1, 2009) – The following is a statement from John McEleney, chairman of the National Automobile Dealer Association, on the expansion of eligibility for a Small Business Administration loan guarantee program designed to help small businesses get access to working capital:

“By significantly expanding the SBA 7(a) loan guarantee program, the President along with SBA Administrator Karen Mills and her staff, have taken a significant step toward unlocking the frozen credit markets that are so critical to the success and continued operation of thousands of small, family-owned dealerships across the country. The newly expanded SBA 7(a) program should encourage lenders to assist thousands of additional dealers with the liquidity they need to keep their doors open, make payroll and prevent further layoffs, especially in these difficult economic times.

“NADA, which is encouraged that the SBA has expanded their loan-guarantee program, will continue to work with the Obama administration to lift the existing regulatory prohibition on vehicle inventory financing (floorplanning). Removing this constraint would enable lenders to make floorplan loans to those many small dealers currently finding it difficult to secure the funds they need to purchase new vehicle inventory.

“The nation’s franchised auto dealers-both domestic and international-applaud the Administration for its actions and its understanding that, unless the dealer credit problem is fixed, any effort to revitalize the auto industry simply will not work.”

BACKGROUND: NADA Chairman John McEleney, members of NADA’s executive committee and senior staff, along with leaders from the National Association of Minority Automobile Dealers (NAMAD), met several times with SBA since Nov. 2008 to advocate a more inclusive size standard for dealers seeking access to the 7(a) loan program. These meetings led to the SBA action, discussed above.

In the American Recovery and Reinvestment Act (ARRA), enacted earlier this year, Congress raised the ceiling on 7(a) loan guarantees to 90 percent and reduced or eliminated borrower fees. This has prompted an increase of 25-plus percent in loan volume and sparked the return of hundreds of lenders to the market. Together, the ARRA and the SBA’s new size standard should enable more dealers to obtain working capital under the 7(a) loan program.

NADA is continuing to work with lenders to encourage them to make 7(a) loans to dealers and with the Obama administration to allow proceeds from these loans to be used for floorplan financing.

Source: www.nada.org
Contacts:

David Hyatt
Vice President
NADA Public Affairs
(703) 821-7120
dhyatt@nada.org

Charles Cyrill
Director of Public Relations
NADA Public Affairs
(703) 821-7121
ccyrill@nada.org

Technorati Tags: floor plan financing, Floorplan Financing, NADA, National Automobile Dealer Association, SBA

MCCLEAN, Va. — John McEleney, chairman of the National Automobile Dealers Association, announced his support this week for recent changes to SBA 7(a), a Small Business Administration loan-guarantee program.

McEleney said an expansion of the program under the terms of the American Recovery and Reinvestment Act of 2009 will benefit dealers by providing an incentive for lenders to extend floorplanning lines of credit.

“By significantly expanding the SBA 7(a) loan guarantee program, the President along with SBA Administrator Karen Mills and her staff, have taken a significant step toward unlocking the frozen credit markets that are so critical to the success and continued operation of thousands of small, family-owned dealerships across the country,” McEleney said. “The newly expanded SBA 7(a) program should encourage lenders to assist thousands of additional dealers with the liquidity they need to keep their doors open, make payroll and prevent further layoffs, especially in these difficult economic times.”

The NADA has met with officials from the SBA and the Obama administration several times since last November, all in an effort to rally support for U.S. dealerships. Economic turmoil and frozen credit markets have resulted in record declines in new-car sales and put thousands of dealers out of business.

“The nation’s franchised auto dealers — both domestic and international — applaud the Administration for its actions and its understanding that, unless the dealer credit problem is fixed, any effort to revitalize the auto industry simply will not work,” McEleney said.

Source: F&I management & Technology

Technorati Tags: floor plan financing, Floorplan Financing