Textron exits floorplan financing

Posted on

Textron Inc. will exit all of Textron Financial Corporation’s commercial finance businesses, including floorplan financing for marine dealers, through a combination of orderly liquidation and selected sales, the company announced.

The company previously indicated that TFC would be exiting its Asset Based Lending and Structured Capital segments, as well as several additional product lines, representing about $2 billion in managed receivables.

“Executing this new strategic direction for TFC is expected to significantly enhance our long-term liquidity position in light of continuing disruption and instability in the capital markets,” Textron chairman, president and CEO Lewis B. Campbell said in a statement.

RBC Capital Markets analyst Edward Aaron said there was no specific data available on the size of Textron’s market share, but “10 percent-15 percent is probably a reasonable market share estimate for the RV/marine space.”

“Given the tight credit conditions and Textron’s reputations for taking lower quality dealers, we expect this news to ultimately cause a number of dealer failures,” Aaron wrote. “The exact magnitude is difficult to predict.”

In response to Textron’s announcement, Genmar chairman Irwin Jacobs announced plans to immediately attempt to come up with one or more floorplan financing alternatives for its dealers.

“It doesn’t come as a complete surprise or shock to me,” Jacobs said in a letter to dealers about Textron’s plans.

“I know for a fact that Textron did everything they could to stay in the floorplan business; however, with the recent tumultuous credit markets along with the difficult commercial paper markets … I’m sure Textron’s cost of money versus what they’ve been charging for floorplan financing has become a negative interest spread for them,” he added.

Jacobs noted that Textron is doing all it can to fulfill its financial commitments for the next 90 days, and after that Textron has agreed to support dealers in continuing to finance the floorplan outstandings while dealers either sell their boats at retail and/or convert their Textron floorplan financing to another finance company.

“I am having discussions with several companies who have shown some interest in supporting a Genmar retail finance company,” Jacobs said, promising to keep dealers updated about any progress made.

Click here to read Jacobs’ letter in its entirety.

Welcome to TradeOnlyToday’s premium content! To continue reading, please register now, for access to 10 free stories per month. Or subscribe, for unlimited access to all TradeOnlyToday content!

Click here to Register ... it's free!

Basic subscription: Registered members get free access to 10 premium content stories each month!

Click here to Register!

Subscribe ... for unlimited access!

Individual subscription: $29 for unlimited site access for one year.

Small Business subscription: $140 for unlimited site access for up to 10 members of a company for one year.

Corporate subscription: $300 for unlimited site access for all members of a company for one year.

You may close this dialog after seconds.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.

Vote Today

Should there be new boating-safety regulations after the three-boat crash in Florida?

View Results

Loading ... Loading ...

Search Boats for Sale

Length
Year
Price

Login to Trade Only Today

Lost Password