Archive for July, 2009

When the Small Business Administration announced a new dealer floorplan loan program in early June, it was heralded by industry leaders as a breakthrough in solving the credit crunch plaguing the marine industry.

Since then, many dealers have complained that the program does them no good because they can’t find any SBA-approved lenders that offer floorplan financing.

Industry leaders continue to praise the program, however, and say dealers need to put more effort into educating the banks about floorplan financing and about their business.

“We really do feel the SBA floorplan loan program is a first step in improving access to credit for dealers,” says Cindy Squires, legislative counsel for the National Marine Manufacturers Association. “It is going to be a process of educating a lot of regional banks. “It’s not going to be a matter of just flipping a switch.”

As of July 1, dealer floorplan loans were available for a minimum of $500,000 up to $2 million under the SBA 7 (a) loan program. With a maximum repayment term of five years, the loans will come with a 60 to 75 percent government guarantee.

Jim Coburn, president of the National Marine Bankers Association, says dealers need to develop a game plan.

“Look for those who are SBA-approved, make an appointment to see them and tell them about your business and your industry,” Coburn says. “Have a business plan and have your data with you. Some of these banks don’t really know what floorplan lending is. It does take a lot of work on the dealer’s part to get this done. It is relationship building.”

Source Trade Only Today
- Melanie Winters

Technorati Tags: floor plan financing, Small Business Administration

Now let’s turn to some key factors that influenced our wholesale sales, that is the boats we sold to our dealer network. In addition to the underlying retail demand, another factor that is having an effect on overall wholesale demand is the availability and cost of floor plan financing. Several traditional floor plan lenders have exited the market or materially reduced their exposure, and the remaining lenders have imposed stricter lending criteria as they seek to protect the quality of their loan portfolios.

Although Brunswick dealers continue to benefit from the financing availability provided by BAC, our joint venture with GE, beginning April 1, dealers became subject to revised terms, including higher financing costs and long curtailment payments. These changes translate to higher costs for dealers to carry inventory, which has led Brunswick and our dealers to reassess and ultimately reduce wholesale orders. This will ultimately lead to a healthier Marine environment with lower inventory levels held in the dealer system.

In response to these market factors, and our strategy to do all we can to protect our dealer network, we’ve reduced the number of units that we sold to dealers nearly 60% in the second quarter versus last year. This is the same percentage decline experienced in the first quarter of 2009.

Technorati Tags: Brunswick Corporation, Floor plan

SBA floorplan financing

When the SBA announced its dealer floorplan financing program on July 6, the industry described it as “the first step in improving access to credit for dealers.” Three weeks into the program, dealers are still finding it difficult to find banks willing to get involved with dealer floorplan financing.

Dealers trying to take advantage of the SBA floorplan lending program are encountering difficulties in finding local banks that can handle these loans. Even if they[dealers] do find these banks, dealers are saying the SBA approved branch banks are showing little or no interest in lending floorplan money to dealers, even with the 80 percent backing from SBA. Part of the reason for this is a lack of familiarity with what’s required in approving dealer floorplan lending plans.

To provide banks with more concrete information about the dealer floorplan lending program, SBA has completed a checklist and instructions for applying for a 7(a) loan as part of the dealer floorplan program. The Marine Retailers Association of America (MRAA) said in a recent dealer advisory that it expects more banks to look at the 7(A) loan program for dealer floorplans as the application process become better established and financial institutions are more comfortable in making these loans.

Dealers that have questions about the SBA approved banks should call their local field office at 916/735-1986 or e-mail their questions to: 7aquestions@sba.gov.

Source Boat and Motor Dealer

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