Senate bill would extend SBA lending program

Posted on 02 July 2010

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An amendment to the Small Business Lending Fund Act of 2010, offered by Sen. Mary Landrieu, D-La., outlines a number of NMMA-supported changes to the Small Business Administration's Dealer Floor Plan Program, including raising loan caps from $2 million to $5 million, ensuring a 100 percent advance rate and extending the program to 2013, the association said.

"One of the most important aspects of the small business bill is the extension and the expansion of [SBA 7a] loans," Landrieu said during debate on the bill. "To put this in plain English, these are the loans that the Small Business Administration partners with banks to make what we call floorplan lending. It is any business that has inventory - maybe it is a tractor company or a manufactured home company or a boat, marine industry with a small business owner - and you have some of these in Illinois, I know, Mr. President, and I have many of them in Louisiana - that has to buy inventory and put it in their showrooms for when people come by and they look at the product."

"They look at all these products they want to buy - boats, tractors, for example. They do not usually push the button to buy these products on the Internet; they go down to their local dealer," she added. "They want to walk into a showroom. They want to look at the product. They heard about it and they might have documents from the Internet. They go to their local small business, whether it is in some parts of Illinois or Louisiana down in Thibodeaux, Violet, Larose. They walk into that local marine operator and say: I have looked on the Internet and this is the kind of boat I want to buy. Do you have one in stock? If we pass this bill, he might have one in stock. If we do not pass this bill, chances are he will not be able to make that sale. That is what the [7a] lending program does."

Click here to read the NMMA's letter of support to Sen. Landrieu.

Comments

1 Friday, 02 July 2010 16:35

This lack of floor plan financing is exactly why I think the idea of having a manufacturers showroom at the plant makes so much sense. I applaud Regal for doing so. I know the less expensive purchases are probably more impulsive and inventory needs to be on the ground locally, but anyone considering spending $100K + would have the resources and the time to visit a factory showroom to see the model they were interested in. The dealer would be relieved of having the interest expense of stocking the more expensive models and the customer could order the exact boat he wants equipped exactly how he wants it. For those of us who live inland, we have to travel to visit most dealers or boat shows with the boats were interested in anyway so why not travel to a factory showroom where we're guaranteed to be able to see the exact model we're interested in? Hopefully the manufacturers will staff these showrooms with people who really know the product which isn't always the case at a dealer representing several lines. I think it would be a win - win for the maufacturer, dealer, and the customer. Let's face it, things are different now and will remain so for the foreseeable future. The old ways of doing things don't work in this "new normal". It's time for some fresh thinking and some innovative retailing. I think maufacturers' showrooms at the factories will build owner loyalty and make for more satisfied consumers and dealers. Happy 4th of July to all!

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